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Geographic redistribution of US manufacturing and the role of state development policy

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  • Lee, Yoonsoo

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 US 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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  • Lee, Yoonsoo, 2008. "Geographic redistribution of US manufacturing and the role of state development policy," Journal of Urban Economics, Elsevier, vol. 64(2), pages 436-450, September.
  • Handle: RePEc:eee:juecon:v:64:y:2008:i:2:p:436-450
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    1. repec:kap:sbusec:v:49:y:2017:i:4:d:10.1007_s11187-017-9859-5 is not listed on IDEAS
    2. Mark D. Partridge & M. Rose Olfert, 2011. "The Winners' Choice: Sustainable Economic Strategies for Successful 21st-Century Regions," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 33(2), pages 143-178.
    3. Josep-Maria Arauzo-Carod & Daniel Liviano-Solis & Miguel Manjón-Antolín, 2010. "Empirical Studies In Industrial Location: An Assessment Of Their Methods And Results," Journal of Regional Science, Wiley Blackwell, vol. 50(3), pages 685-711.
    4. repec:eee:jbrese:v:77:y:2017:i:c:p:95-101 is not listed on IDEAS
    5. Timothy J. Bartik & George Erickcek, 2014. "Simulating the Effects of the Tax Credit Program of the Michigan Economic Growth Authority on Job Creation and Fiscal Benefits," Economic Development Quarterly, , vol. 28(4), pages 314-327, November.
    6. Jeffrey Thompson, 2010. "Prioritizing Approaches to Economic Development in New England: Skills, Infrastructure, and Tax Incentives," Published Studies priorities_september7_per, Political Economy Research Institute, University of Massachusetts at Amherst.
    7. Josep-Maria Arauzo-Carod & Miguel Manjón-Antolín, 2012. "(Optimal) spatial aggregation in the determinants of industrial location," Small Business Economics, Springer, pages 645-658.
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    9. Oscar Martinez Ibañez & Miguel Manjón Antolín & Josep-Maria Arauzo-Carod, 2013. "The Geographical Scope of Industrial Location Determinants: An Alternative Approach," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 104(2), pages 194-214, April.
    10. Kinne, Jan & Resch, Bernd, 2017. "Analysing and predicting micro-location patterns of software firms," ZEW Discussion Papers 17-063, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    11. Miguel Manjón-Antolín & Josep-Maria Arauzo-Carod, 2011. "Locations and relocations: determinants, modelling, and interrelations," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 47(1), pages 131-146, August.
    12. Jean Dubé & Cédric Brunelle, 2014. "Dots to dots: a general methodology to build local indicators using spatial micro-data," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 53(1), pages 245-272, August.
    13. Arauzo-Carod, Josep-Maria & Manjón-Antolín, Miguel & Martínez , Óscar, 2015. "The Relocation of R&D Establishments in France: An Empirical Analysis," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 33, pages 97-119.
    14. William Hoyt & Christopher Jepsen & Kenneth Troske, 2009. "Business Incentives and Employment: What Incentives Work and Where?," Working Papers 2009-02, University of Kentucky, Institute for Federalism and Intergovernmental Relations.
    15. Patrick Button, 2015. "Do Tax Incentives Affect Business Location? Evidence from State Film Incentives," Working Papers 1507, Tulane University, Department of Economics, revised Aug 2017.
    16. Kristian Behrens & Brahim Boualam & Julien Martin, 2016. "The resilience of the Canadian textile industries and clusters to shocks, 2001-2013," CIRANO Project Reports 2016rp-05, CIRANO.
    17. Conroy, Tessa & Deller, Steven & Tsvetkova, Alexandra, 2016. "Regional business climate and interstate manufacturing relocation decisions," Regional Science and Urban Economics, Elsevier, vol. 60(C), pages 155-168.
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    Keywords

    Entry Exit Relocation Tax incentive;

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