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BPEA Article

Product Development in the World Auto Industry

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CHANGES in international competition in the past decade, and particularly the competitive problems of once-dominant U.S. firms and industries, have heightened interest in what causes international differences in productivity and product quality. Although analysis of macroeconomic data has produced some important insights, recent research has focused increasingly on the comparative behavior of industries, firms, and factories. Such research raises in a direct way the issue of management efficiency. Especially at the factory level, a growing body of evidence indicates that international differences in internal operations-most notably quality control and inventories-are important in explaining variations in productivity in a number of industries.

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