A model to determine the technicalness of manufacturing industries

Abstract

A statistical model is developed which estimates the degree to which an industry is or is not a high-technology industry. Data for the model were obtained from a nationwide survey of individuals with an interest in plant location decisions.A nationwide survey was conducted with a population of 852 of which 692 responded. The survey instrument listed the descriptions for twenty manufacturing industries. Participants were asked to indicate whether they felt that the production processes for each industry are low-technology or high-technology processes. The dependent variable, y, was computed as the fraction of responses which indicated that the production processes for a given industry are high technology. Based on an ordinary least-squares regression analysis, the factors determined to be the best predictors of technicalness were: finance factors — ratios of value added to net sales, production wages to total payroll, research and development funds to net sales; capital intensity factors — ratios of value added less wages to total capitalization, production workers to capital assets, average asset value to production workers; and a productivity factor — ratio of value added to production workers.