Annual Manufacturing Survey Research Articles

The impact of ICT and e-commerce on employment in Colombia

This study presents new empirical evidence regarding the impact of e-commerce adoption on employment in Colombia, a developing economy. We use firm-level data from the Annual Manufacturing Survey between 2013 and 2018 and differentiate the workforce by skill level and type of contract. We also use multiple correspondence analysis (MCA) to construct a parsimonious set of instrumental variables to account for the endogeneity of e-commerce. Our main finding is that an increase of 1% in the degree of e-commerce penetration increases demand for skilled workers by 0.2% and does not have a negative impact in the demand for unskilled workers. We then delve deep into the evidence and test for complementarity or substitution between skilled labor and ICT capital related to e-commerce implementation by employing a new and specific theoretical framework, which is empirically assessed. Our results confirm that highly skilled workers benefit the most from the introduction of e-commerce and its associated ICTs into a company, exhibiting a high degree of complementarity compared to unskilled workers. Thus, our findings support the hypothesis that ICT utilization and e-commerce adoption lead to labor substitution, particularly for low skill workers. This study recommends that policymakers invest in skill development to meet e-commerce demands, focusing on both upskilling workers to enhance digital literacy and implementing targeted support programs for a smooth transition to the digital economy across all skill levels.

Evolution of Colombia’s market for manufactured products of the wood industry

A detailed exploration of the development of Colombia's market for manufactured products of the wood industry since its early days, with an analytical focus on the period 1970-2021, is presented. The examination of early days draws upon historical information, wood industry-specific statistics derived from Colombia’s Annual Manufacturing Survey and industrial census, and data from the National Accounts of Colombia (NAC), which offers insightful understanding of the market dynamics up to the end of the 1960s. For 1970 to 2021 comprehensive consolidated data derived from the Supply and Use Tables of the NAC and other sources provides the base for an in-depth examining of the market aspects such as quantities of supply (national production), demand, and the components of demand – including domestic consumption, exports, and imports. The exploration reveals a significant shift in the manufactured products of the wood industry market’s dynamics, transitioning from a primarily domestic consuming and export-driven one to a market increasingly reliant on imports to satisfy domestic consumption. Critical factors contributing to this shift are identified, highlighting Colombian forest resource depletion and inadequate nation’s wood industry development. The paper synthesizes historical data to articulate the interplay between economic policies and market outcomes, culminating in a discernible need for strategic industry modernization. Furthermore, it offers comprehensive and detailed information, facilitating a thorough understanding of all market aspects without necessitating consultation of additional sources.

Complementarities between product and process innovation and their effects on employment: a firm-level analysis of manufacturing firms in Colombia

ABSTRACT The introduction or adoption of innovations at the firm level has consequences for job creation that may differ across low-middle and high-income countries. Also, the type of innovation that firms introduce, such as process or product innovations, can affect employment through different channels. This paper aims to study the effects of innovation on employment growth at the firm level using a framework that considers the nature of innovation and the relative efficiency of the firms. The study uses a rich panel dataset that combines information from two different surveys in Colombia: the Annual Manufacturing Survey and the Survey on Development and Technological Innovation in the Manufacturing Sector. The article provides empirical evidence supporting the idea that the nature of innovation in the country involves complementarities between process and product innovations. The paper discusses how this result is related to the patterns of innovation in middle income countries, which need not only new technologies but also imitation of processes and products. Another novelty of this analysis is the study of displacement effects of process innovation through improvements in the relative efficiency of the firms. Findings show that some firms reduce employment from process innovations, reflecting high heterogeneity in efficiency among firms.

Determinants of efficient water use and conservation in the Colombian manufacturing industry using machine learning

Water is a fundamental aspect of achieving sustainable industries, and it is essential for firms to make efficient use of it. However, not all companies have sustainable water management practices in place. In this study, we aim to answer the research question: What factors influenced the efficient use and saving of water in the Colombian manufacturing industry in 2020? We used data from the Annual Manufacturing Survey and the Industrial Environmental Survey conducted by DANE to investigate this question. Our study grouped the variables into four categories: Environmental commitment, Risk mitigation, Innovation, and Location. We used two supervised learning machine-learning algorithms—decision tree and logit regression with LASSO regularization—to analyze the data. The results underscore those investments in wastewater treatment, total water consumption, and commitments to air and climate protection emerge as pivotal drivers for embracing sustainable practices. Moreover, the geographical location of companies significantly influences the likelihood of implementing water conservation initiatives. To enhance efficient water use and conservation in the Colombian manufacturing sector, several targeted public policies are recommended. These include offering fiscal and financial incentives to encourage investments in advanced wastewater treatment and reuse technologies. Additionally, advocating for specialized training and environmental education programs tailored for corporate personnel is crucial. Moreover, establishing initiatives for environmental certification and eco-labeling within the corporate sector can significantly promote sustainable water practices. Lastly, enforcing more stringent environmental regulations and standards, especially for industries like Textile, Metallurgy, and Manufacturing of rubber and plastic products, is essential to ensure responsible water management across the sector.

On the Direct and Indirect Effects of ICT on SMEs Export Performance: Evidence from Colombian Manufacturing

AbstractThe objective of this research is to investigate the effect of ICT on the performance of Colombian manufacturing SMEs in export markets. In doing so, we explore the direct effect of ICT on exports and propose a new indirect effect that operates through imports: purchasing foreign intermediates incentivise ICT use, and ICT experience on imports exerts a positive impact on exports. To perform our empirical analysis, we estimate a dynamic generalised linear model (GLM) that accounts for the fact that export intensity is a proportion and corrects for sample selection. The dataset we use is the result of merging three databases: the Annual Manufacturing Survey (EAM); the Innovation and Technological Development Survey (EDIT), and the Annual ICT Manufacturing Survey (EAM-TIC), published by the National Administrative Department of Statistics (DANE) in six waves since 2013 to 2018. Our main results uncover that the impacts of different ICT components on export intensity are always positive (direct effect). Further, there is also evidence that previous experience in ICT use on import activity affects the firm’s current export performance (indirect effect). Other results show persistence in export performance or self-selection to continue exporting, among others.

Effects of innovative effort on different components of productivity: Evidence for the Colombian manufacturing industry

This document focuses on estimating the effect of innovative effort on productivity when it is disaggregated in terms of productive technical efficiency and other components associated with demand and unit input costs. These components are developed and estimated from panel data. I show that demand characteristics are the elements where the innovative effort affects in greater proportion. Thus, if the objective is to increase physical productivity, a strategy would be to increase by 1% amounts invested in internal R& D, technology transfer, and technical assistance, and consulting. Thus, the physical productivity (TFPQ, as named in productivity studies) would increase between 0.04% and 0.07%. The increase of amounts in the marketing of innovations, internal R & D, and the technical assistance, and consulting would increase the characteristics of demand between 0.40% and 0.43%; finally, increasing the acquisition of machinery and equipment by 1% for the promotion of innovation would generate a reduction in input costs between 0.07% and 0.05%. These results will be analyzed from the annual manufacturing survey (EAM, as it is named in Colombia) between 2003 and 2012 and the surveys of innovation and technological development for the manufacturing industry (EDIT, as it is named in Colombia) provided by the DANE between 2008 and 2012.

Are importing and exporting complements or substitutes in an emerging economy? The case of Colombia

AbstractThe aim of this paper is to investigate the impact of two trading strategies (exporting and importing) on total factor productivity (TFP) and the potential complementarity/substitutability effects of these strategies. In order to assess these effects, robust estimates of TFP are obtained using a general method of moments approach that explicitly determines the ability of a firm's trading experience to affect productivity. Data from the Annual Manufacturing Survey spanning from 2007 to 2016 is used for Colombian manufacturing firms. Our estimation results suggest that, regardless of the technological intensity of the industry in which the firm operates, active trading strategies (exporting only, importing only, both importing and exporting) pay positive rewards in terms of productivity. Nevertheless, whilst positive (complementary) synergies are found between exporting and importing for firms in med/high‐tech sectors, for firms operating in low‐tech and med/low‐tech sectors, importing and exporting appear to be substitutes.

La generación de empleo en el sector industrial en Colombia 2010-2018

Este artículo busca explicar la relación existente entre la política laboral y la generación de empleo en el sector industrial en Colombia para el periodo 2010-2018. Para ello, inicialmente se reflexiona sobre el tema laboral en los planes de desarrollo de las dos administraciones del expresidente Juan Manuel Santos. En primer lugar, se realiza un diagnóstico del empleo industrial para el lapso referenciado a partir de los datos de la Encuesta Anual Manufacturera (EAM), del Departamento Administrativo Nacional de Estadística (DANE). En segundo lugar, se examina la caracterización de la generación del empleo industrial, haciendo énfasis en la evolución de su participación en la ocupación total y su crecimiento, así como en la importancia de los subsectores industriales en la generación de empleo y la forma en que las nueve principales ciudades colombianas la integran en dichos subsectores. Una de las conclusiones más importantes es que el empleo industrial en Colombia ha respondido tanto a cambios coyunturales (desaceleración de la economía mundial, revaluación de la tasa de cambio, cierre del mercado venezolano) como a los cambios surgidos desde la apertura económica en materia laboral, en la búsqueda de una mayor flexibilización en el mercado de trabajo.

A Survey of Papers Using Indonesian Firm-Level Data: Research Questions and Insights for Novel Policy-Relevant Research in Economics

I review the literature in international trade that uses Indonesian firm-level data, particularly the Annual Manufacturing Survey compiled by the Industrial Statistics division of Statistics Indonesia. I identify the issues addressed and the scope for new policy-relevant research questions. From a data-availability approach, I provide insights into general data concerns and constraints faced by researchers. From a policy-relevance approach, I find that a limited number of topics are analysed in the studies that use the data and are published in international refereed journals. I identify some overall trends, and then discuss new topics and methods for a continuing policy-relevant research agenda.

Effects of Innovative Effort on Different Components of Productivity: Evidence for the Colombian Manufacturing Industry

This document focuses on estimating the effect of innovative effort on productivity, when it is disaggregated in terms of productive technical efficiency and other components associated with demand and unit input costs . These components are developed and estimated from panel data. I show that demand characteristics are the elements where the innovative effort affects in greater proportion. Thus, if the objective is to increase physical productivity, a strategy would be to increase by 1% amounts invested in internal R& D, technology transfer and technical assistance and consulting. Thus, TFPQ would increase between 0.04% and 0.07%. The increase of amounts in marketing of innovations, internal R & D and the one of technical assistance and consulting would increase the characteristics of demand between 0.40% and 0.43%; finally, increasing the acquisition of machinery and equipment by 1% for the promotion of innovation would generate a reduction in input costs between 0.07% and 0.05%. These results will be analyzed from the annual manufacturing survey (EAM) between 2003-2012 and the surveys of innovation and technological development for the manufacturing industry (EDIT) provided by the DANE between 2008-2012.

Identificación de perfiles característicos de las Tecnologías de la Información y Comunicación en empresas del sector manufacturero en Colombia mediante análisis de conglomerado y discriminante


 Objetivo: Estructurar un método para analizar la adopción y uso de las Tecnologías de la Información y la Comunicación-TIC en 7542 empresas del sector manufacturero de Colombia. Metodología: Para esta investigación se aplicaron las técnicas análisis multivariado de conglomerado y discriminante, y se tomaron los resultados de la encuesta anual manufacturera del Departamento Administrativo Nacional de Estadística de Colombia correspondiente al año 2017. Se aplicó un análisis de conglomerados para la identificación de perfiles característicos en la adopción y uso de las TIC, seguidamente se evaluó la capacidad de las variables analizadas para clasificar correctamente las empresas manufactureras en los perfiles identificados. Resultados: Los resultados muestran que el modelo clasifica correctamente en un 94,4% los perfiles TIC del sector manufacturero analizado. Conclusiones: La aplicación del método permitió contrastar la capacidad discriminante de las variables para identificar perfiles característicos significativamente homogéneos intra-grupos y heterogéneos extra-grupos.

Business-Level Expectations and Uncertainty

The Census Bureau’s 2015 Management and Organizational Practices Survey (MOPS) utilized innovative methodology to collect five-point forecast distributions over own future shipments, employment, and capital and materials expenditures for 35,000 U.S. manufacturing plants. First and second moments of these plant-level forecast distributions covary strongly with first and second moments, respectively, of historical outcomes. The first moment of the distribution provides a measure of business’ expectations for future outcomes, while the second moment provides a measure of business’ subjective uncertainty over those outcomes. This subjective uncertainty measure correlates positively with financial risk measures. Drawing on the Annual Survey of Manufactures and the Census of Manufactures for the corresponding realizations, we find that subjective expectations are highly predictive of actual outcomes and, in fact, more predictive than statistical models fit to historical data. When respondents express greater subjective uncertainty about future outcomes at their plants, their forecasts are less accurate. However, managers supply overly precise forecast distributions in that implied confidence intervals for sales growth rates are much narrower than the distribution of actual outcomes. Finally, we develop evidence that greater use of predictive computing and structured management practices at the plant and a more decentralized decision-making process (across plants in the same firm) are associated with better forecast accuracy.

Fixed or open-ended? Labor contract and productivity in the Colombian manufacturing sector

ABSTRACT Using the Colombian Annual Manufacturing Survey (AMS) between 2000 and 2014, this paper investigates the effect of labor contract modalities on firm productivity within the industrial sector through a structural model. We find that the elasticity of revenue with respect to temporary workers is often lower than that with respect to permanent workers, but not in small firms, where some forms of flexibility might lead to productivity gains.

Human capital, innovation and productivity in Colombian enterprises: a structural approach using instrumental variables

ABSTRACT In this paper we explore the R&D–innovation–productivity linkage for the Colombian manufacturing industry, paying special attention to the role of human capital. Using data from two firm-level surveys, the Survey of Development and Technological Innovation (EDIT) and the Annual Manufacturing Survey (EAM), we extend the model of Crépon, Duguet, and Mairesse [1998. ‘Research, Innovation and Productivity: An Econometric Analysis at the Firm Level.’ Economics of Innovation and New Technology 7 (2): 115–158] (hereafter CDM) by including human capital at the investment decision stage. We implement an instrumental variable methodology to correct the potential endogeneity that may arise with the inclusion of human capital. Our results suggest that human capital has a causal effect on research and development (R&D) investment decisions, the innovation behavior of the firm, and increases the labor productivity of the firm. The conclusions highlight the relevance of human capital in the surrounding literature which stands in contrast to prior work that has not included this variable.

Heterogeneous labour demand in the Colombian manufacturing sector

Using the Colombian Annual Manufacturing Survey between 2000 and 2013, we investigate the heterogeneity in labour demand within the industrial sector based on the elasticities. We find that long-run own-price, output, and TFP elasticities vary across a variety of dimensions such as regions, sectors, and plant sizes depending on workers’ skills and contract modalities (open-ended and temporary). The determinants of industrial labour demand are quantitatively different, mainly, across regions and, to some extent, subsectors when we focus on demand for unskilled workers. It is possible that, given the importance of apparel in the manufacturing sector in Pereira, labour demand for permanent skilled workers in that city is different from that of Bogotá, Cali, and Medellín. Thus, labour demand heterogeneity is just a symptom of the underlying differences in the production processes and produced goods, technologies, labour force qualification and productivity, preferences of workers, rigidities and wage-setting procedures, and peculiarities of goods’ markets, etc. Suggestions to induce more wage flexibility and decrease labour segmentation emerge from this paper.

Automation and Offshoring in Durable Goods Manufacturing: An Indiana Case Study

The loss of manufacturing jobs is largely attributed to either offshoring or automation. Using state-level data from the Annual Survey of Manufactures and unit record administrative data from the Indiana Department of Workforce Development, we determine the drivers of durable goods manufacturing employment losses in Indiana. We test a simple model that explains changes in industry production employment by changes in output, wages, intermediate input consumption, productivity, capital-to-labor ratios, or a proxy related to these explanatory variables. Using the unit record data, the authors assess the consequences of large layoff events on the wages of those who remain employed at a particular manufacturing establishment. The data suggest that offshoring was the primary driver for employment losses and productivity gains in Indiana, not automation. We also find that average wages for workers at establishments that experienced large redundancy events rose for those workers who remained after large layoff events.

Trends in temporary employment in the industry of the Boyaca department, 2000-2013

The transition from the Fordist to post-Fordist techno-productive model has brought with it a noticeable labor flexibilization from which outsourcing is derived. Peripheral industry, such as the Colombian one that suffered a regression at the end of the last century, does not escape from this phenomenon. The present article seeks to establish the dynamics of fixed-term employment in the manufacturing industry, using information from the Annual Manufacturing Survey (AMS). The analysis found that the use of temporary employment since the 1990s increased at the expense of permanent employment, until reaching 41.4% in 2013; in the Boyaca region, although it has grown rapidly since the beginning of this century, temporary employment is only about 30%. Direct contracting exceeded indirect hiring, which does not contradict the persistence of the above mentioned trend that has predominated in the most relevant occupational categories of the industrial sector.

Production Externalities in the Wood Furniture Industry in Central Java

This paper exploits micro firm level data to examine the impact of spatial clustering and links to foreign buyer networks on firm performance in the wood furniture industry in Central Java, Indonesia. The analysis is based on an annual manufacturing survey. We identify the impact of specialization of the cluster, diversification, and links to foreign buyer networks. For this purpose, a production function framework is developed. The results lend support to the view that clustering of large and medium scale specialized firms improves firm performance, while clustering of small scale specialized firms and clustering of diverse firms are not conducive to firm performance. We also find a clear positive association between involvement in exporting activities and firm performance.

Business-Level Expectations and Uncertainty

The Census Bureau’s 2015 Management and Organizational Practices Survey (MOPS) utilized innovative methodology to collect five-point forecast distributions over own future shipments, employment, and capital and materials expenditures for 35,000 U.S. manufacturing plants. First and second moments of these plant-level forecast distributions covary strongly with first and second moments, respectively, of historical outcomes. The first moment of the distribution provides a measure of business’ expectations for future outcomes, while the second moment provides a measure of business’ subjective uncertainty over those outcomes. This subjective uncertainty measure correlates positively with financial risk measures. Drawing on the Annual Survey of Manufactures and the Census of Manufactures for the corresponding realizations, we find that subjective expectations are highly predictive of actual outcomes and, in fact, more predictive than statistical models fit to historical data. When respondents express greater subjective uncertainty about future outcomes at their plants, their forecasts are less accurate. However, managers supply overly precise forecast distributions in that implied confidence intervals for sales growth rates are much narrower than the distribution of actual outcomes. Finally, we develop evidence that greater use of predictive computing and structured management practices at the plant and a more decentralized decision-making process (across plants in the same firm) are associated with better forecast accuracy.

Age-productivity profiles of entrants and exits: evidence from Canadian manufacturing

Using the Longitudinal Annual Survey of Manufacturers for Canada, this paper aims to better understand the productivity dynamics of entrants and exits as well as the factors associated with their productivity performance. It shows that entrants and exits are lower in labour productivity relative to continuing plants partly because they are smaller in size, less capital intensive, and less associated with exporting, being foreign-controlled and belonging to multi-plant firm structure. It also finds that after controlling for those factors, surviving entrants are less productive when they enter and that they improve their productivity over time to become as productive as continuing plants by around year five after entry. Exits, on the other hand, are found to be less productive than continuing plants after controlling for those factors, and the gap becomes larger as they get closer to exit.