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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


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


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(03), December.
  • Handle: RePEc:ags:jlaare:30975

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    Cited by:

    1. Marasteanu, I. Julia & Jaenicke, Edward C., 2013. "Agglomeration and Spatial Dependence in Certified Organic Operations in the United States," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 149551, Agricultural and Applied Economics Association.
    2. 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.
    3. Lambert, D.M. & Wilcox, M. & English, A. & Stewart, L., 2008. "Ethanol Plant Location Determinants and County Comparative Advantage," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 40(01), pages 117-135, April.
    4. Brown, Jason P. & Florax, Raymond J. G. M. & McNamara, Kevin T., 2009. "Determinants of Investment Flows in U.S. Manufacturing?," The Review of Regional Studies, Southern Regional Science Association, vol. 39(3), pages 269-286.
    5. 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.
    6. Jason P. Brown & Raymond J.G.M. Florax & Kevin T. McNamara, 2008. "Evolution Of Investment Flows In U.S. Manufacturing:A Spatial Panel Approach," Working Papers 08-06, Purdue University, College of Agriculture, Department of Agricultural Economics.
    7. Brown, Jason & Lambert, Dayton, 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.
    8. 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.
    9. 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.
    10. 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.
    11. 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.
    12. 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.
    13. 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.

    More about this item


    agglomeration externalities; business location determinants; food manufacturing; labor heterogeneity; rural development; 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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