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The employment impact of motor vehicle assembly plant openings

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Listed author(s):
  • Adams, Brian

Abstract

Local governments often offer motor vehicle assembly plants large subsidies to locate in their jurisdiction. A frequent justification is that an assembly plant will attract upstream parts suppliers to locate nearby and provide manufacturing jobs. Using propensity score matching, I find that an assembly plant brings an average of 500 additional parts supplier jobs beyond the employment gains the region would have experienced without the assembly plant. This increase is far less than predicted by the input–output models that state development agencies often employ.

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Article provided by Elsevier in its journal Regional Science and Urban Economics.

Volume (Year): 58 (2016)
Issue (Month): C ()
Pages: 57-70

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Handle: RePEc:eee:regeco:v:58:y:2016:i:c:p:57-70
DOI: 10.1016/j.regsciurbeco.2016.02.005
Contact details of provider: Web page: http://www.elsevier.com/locate/regec

Keywords: Regional development; Motor vehicle manufacturing; Agglomeration; Location choice;

Find related papers by JEL classification:

  • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
  • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment

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