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Labor-Force Heterogeneity as a Source of Agglomeration Economies in an Empirical Analysis of County-Level Determinants of Food Plant Entry

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  • Davis, David E.
  • Schluter, Gerald E.

Abstract

Results of this study show that a heterogeneous labor force serves to attract new food manufacturing investment. We conduct analysis for SIC 20, Food and Kindred Product Manufacturing, and disaggregate analysis on all nine three-digit SIC food industries. Heterogeneity variables are a significant factor in nearly all specifications. We also examine which factors create the greatest increases in the expected number of new establishments. Areas with a high degree of labor heterogeneity are found to have large advantages. Labor heterogeneity is among the most important factors attracting food manufacturing to urban areas over rural areas.

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  • Davis, David E. & Schluter, Gerald E., 2005. "Labor-Force Heterogeneity as a Source of Agglomeration Economies in an Empirical Analysis of County-Level Determinants of Food Plant Entry," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 30(3), pages 1-22, December.
    • Handle: RePEc:ags:jlaare:30975
    DOI: 10.22004/ag.econ.30975
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    2. Brown, Jason P. & Florax, Raymond J.G.M. & McNamara, Kevin T., 2008. "Evolution Of Investment Flows In U.S. Manufacturing: A Spatial Panel Approach," Working papers 42502, Purdue University, Department of Agricultural Economics.
    3. He-Lambert, Lixia & English, Burton C. & Lambert, Dayton M. & Shylo, Oleg & Larson, James A. & Yu, T. Edward & Wilson, Bradly, 2018. "Determining a geographic high resolution supply chain network for a large scale biofuel industry," Applied Energy, Elsevier, vol. 218(C), pages 266-281.
    4. Cazzuffi, Chiara & Pereira-López, Mariana & Soloaga, Isidro, 2017. "Local poverty reduction in Chile and Mexico: The role of food manufacturing growth," Food Policy, Elsevier, vol. 68(C), pages 160-185.
    5. Brown, Jason P. & Florax, Raymond J.G.M. & McNamara, Kevin T., 2009. "Determinants Of Investment Flows In U.S. Manufacturing," Working papers 54835, Purdue University, Department of Agricultural Economics.
    6. Jason Brown & Dayton Lambert, 2014. "Location decisions of natural gas extraction establishments: a smooth transition count model approach," Research Working Paper RWP 14-5, Federal Reserve Bank of Kansas City.
    7. Anna Matas Prat & Adriana Karina Ruíz Marín & Josep Lluís Raymond Bara, 2016. "How do road infrastructure investments affect the regional economy? Evidence from Spain," Working Papers wpdea1610, Department of Applied Economics at Universitat Autonoma of Barcelona.
    8. A. Ford Ramsey & Barry Goodwin & Mildred Haley, 2021. "Labor Dynamics and Supply Chain Disruption in Food Manufacturing," NBER Chapters, in: Risks in Agricultural Supply Chains, National Bureau of Economic Research, Inc.
    9. Lambert, Dayton M. & Brown, Jason P. & Florax, Raymond J.G.M., 2010. "A two-step estimator for a spatial lag model of counts: Theory, small sample performance and an application," Regional Science and Urban Economics, Elsevier, vol. 40(4), pages 241-252, July.
    10. repec:rre:publsh:v:39:y:2009:i:3:p:269-86 is not listed on IDEAS
    11. Xu, Wan & Khachatryan, Hayk, 2013. "The Impact of Integrated Pest Management Practices on U.S. National Nursery Industry Annul Sales Revenue: An Application of Smooth Transition Spatial Autoregressive Models," 2013 Annual Meeting, February 2-5, 2013, Orlando, Florida 142961, Southern Agricultural Economics Association.
    12. Lambert, Dayton M. & Wilcox, Michael D. & English, Alicia & Stewart, Lance A., 2008. "Ethanol Plant Location Determinants and County Comparative Advantage," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 40(1), pages 1-19, April.
    13. Dayton M. Lambert & Kevin T. McNamara, 2009. "Location determinants of food manufacturers in the United States, 2000–2004: are nonmetropolitan counties competitive?," Agricultural Economics, International Association of Agricultural Economists, vol. 40(6), pages 617-630, November.
    14. Marasteanu, I. Julia & Jaenicke, Edward C., 2014. "Clusters of Organic Operations and their Impact on Regional Economic Growth in the United States," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170336, Agricultural and Applied Economics Association.
    15. Wu, Wenchao, 2017. "Agglomeration Economy and Input-output Linkage: Evidence from the Entry of the Agro-food Industry in China," Japanese Journal of Agricultural Economics (formerly Japanese Journal of Rural Economics), Agricultural Economics Society of Japan (AESJ), vol. 19.
    16. Jaenicke, Edward C. & Goetz, Stephan J. & Wu, Ping-Chao & Dimitri, Carolyn, 2009. "Identifying and Measuring the Effect of Firm Clusters Among Certified Organic Processors and Handlers," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49205, Agricultural and Applied Economics Association.
    17. Schmit, Todd M. & Park, Kristen S. & Henehan, Brian M. & Hall, Jeffrey, 2012. "A Study of Food and Beverage Manufacturing in New York State," EB Series 186544, Cornell University, Department of Applied Economics and Management.

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    More about this item

    Keywords

    Labor and Human Capital;

    JEL classification:

    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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