Competitive Adjustment in the United States Steel Industry: Some Spatial Aspects of Capacity Change by Integrated Producers
AbstractThis research draws on an extensive database at the plant level to analyze capacity changes in the in the integrated sector of the U.S. steel industry over the period 1974-1991. Reduced form models are developed using panel data from this period with the objective of isolating the market forces that have driven the industry's restructuring. Adjustment in the industry was enormous over the period analyzed, in terms of capacity reduction, plant closure, and permanent job losses, and this adjustment was accompanied by a major shifts in the spatial distribution of raw steel making capacity. Evidence of the importance of competition from imports and from domestic minimills is presented. Closures and capacity reductions brought about a spatial realignment that reflects the ways in which the cost of producing steel in various regions have changed over time, and they have promoted cost savings in steel production. Simply put, the outcome of this redistribution among regions has promoted efficiency in resource allocation for the U.S. economy as a whole, and U.S. steel makers have become stronger, more profitable competitors in world markets. NOTE: This working paper was prepared as part of the Alfred P. Sloan Foundation Steel Research Project.
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Bibliographic InfoPaper provided by EconWPA in its series Urban/Regional with number 9408001.
Date of creation: 31 Aug 1994
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