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Geographic Redistribution of the U.S. Manufacturing and The Role of State Development Policy

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  • Yoonsoo Lee

Abstract

Competition among state and local governments to lure businesses has attracted considerable interest from economists, as well as legislators and policy makers. This paper quantifies the role of plant relocations in the geographic redistribution of manufacturing employment and examines the effectiveness of state development policy. Only a few studies have looked at how manufacturing firms locate their production facilities geographically; they have used either small manufacturing samples or small geographic regions. This paper provides broader evidence of the impact of plant relocations using confidential establishment level data from the U.S. Census Longitudinal Research Database (LRD), covering the full population of manufacturing establishments in the United States over the period from 1972 to 1992. This paper finds a relatively small role for relocation in explaining the disparity of manufacturing employment growth rates across states. Moreover, it finds evidence of very weak effects of incentive programs on plant relocations.

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File URL: ftp://ftp2.census.gov/ces/wp/2007/CES-WP-07-06.pdf
File Function: First version, 2007
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Bibliographic Info

Paper provided by Center for Economic Studies, U.S. Census Bureau in its series Working Papers with number 07-06.

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Length: 41 pages
Date of creation: Mar 2007
Date of revision:
Handle: RePEc:cen:wpaper:07-06

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Keywords: entry; exit; relocation; tax incentive;

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Cited by:
  1. Evan Morris, 2008. "Fiscal Competitiveness and Total Competitiveness: A Note," Canadian Public Policy, University of Toronto Press, vol. 34(4), pages 511-518, December.

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