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The employment impact of motor vehicle assembly plant openings

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  • 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.

Suggested Citation

  • Adams, Brian, 2016. "The employment impact of motor vehicle assembly plant openings," Regional Science and Urban Economics, Elsevier, vol. 58(C), pages 57-70.
    • Handle: RePEc:eee:regeco:v:58:y:2016:i:c:p:57-70
    DOI: 10.1016/j.regsciurbeco.2016.02.005
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    Cited by:

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    2. Lapointe, Simon & Morand, Pierre-Henri, 2019. "Subsidy Bidding Wars and the Structure of Multi-Plant Firms," Working Papers 115, VATT Institute for Economic Research.
    3. Joseph Marchand & Jeremy Weber, 2018. "Local Labor Markets And Natural Resources: A Synthesis Of The Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 32(2), pages 469-490, April.

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    More about this item

    Keywords

    Regional development; Motor vehicle manufacturing; Agglomeration; Location choice;
    All these keywords.

    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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