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Comparing location decisions of domestic and foreign auto supplier plants

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Author Info

  • Thomas Klier
  • Paul Ma
  • Daniel McMillen

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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File URL: http://www.chicagofed.org/digital_assets/publications/working_papers/2004/wp2004_27.pdf
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Bibliographic Info

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
Date of revision:
Handle: RePEc:fip:fedhwp:wp-04-27

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Related research

Keywords: Automobile industry and trade ; Automobiles - Prices ; Industrial location;

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References

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  1. 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.
  2. Thomas H. Klier, 2001. "Spatial Concentration in the U.S. Auto Supplier Industry," The Review of Regional Studies, Southern Regional Science Association, vol. 29(3), pages 294-305, Winter.
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Cited by:
  1. Mitsuyo ANDO & Fukunari KIMURA, 2013. "Evolution of Machinery Production Networks: Linkage of North America with East Asia," Working Papers DP-2013-32, Economic Research Institute for ASEAN and East Asia (ERIA).
  2. 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.

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