Comparing location decisions of domestic and foreign auto supplier plants

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Comparing location decisions of domestic and foreign auto supplier plants

Author Info

Thomas Klier
Paul Ma
Daniel McMillen

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Abstract

Plant locations in the U.S. auto industry have been moving southward for some time now. This paper utilizes a comprehensive dataset of the U.S. auto industry and focuses on plant location decisions of auto supplier plants that were opened less than 15 years ago in the U.S. We find that agglomeration continues to matter: suppliers want to be close to each other as well as to their assembly plant customers. We also find evidence of differences in location factors for domestic and foreign suppliers. Foreign suppliers exhibit a stronger preference to be near highways, other foreign suppliers and foreign assembly plants. That helps explain the different location patterns observed for these two groups within the auto region.

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Paper provided by Federal Reserve Bank of Chicago in its series Working Paper Series with number WP-04-27.

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Date of creation: 2004
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Handle: RePEc:fip:fedhwp:wp-04-27

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This paper has been announced in the following NEP Reports:

NEP-ALL-2005-05-23 (All new papers)

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

List, John A. & McHone, W. Warren & Millimet, Daniel L., 2004. "Effects of environmental regulation on foreign and domestic plant births: is there a home field advantage?," Journal of Urban Economics, Elsevier, vol. 56(2), pages 303-326, September. [Downloadable!] (restricted)

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Thomas H. Klier, 2005. "Determinants of supplier plant location: evidence from the auto industry," Economic Perspectives, Federal Reserve Bank of Chicago, issue Q III, pages 2-15. [Downloadable!]

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This page was last updated on 2009-12-9.

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