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The Birth, Death, and Persistence of Firms: Creative Destruction and the Spatial Distribution of U.S. Manufacturing Establishments, 2000–2006

Author

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  • Jason P. Brown
  • Dayton M. Lambert
  • Raymond J. G. M. Florax

Abstract

This article deals with the dynamics of the U.S. manufacturing sector, analyzing the birth, death, and ongoing existence of firms in the beginning of the twenty-first century. Schumpeter’s notion of creative destruction is hypothesized to explain the spatiotemporal dynamics of the distribution of manufacturing establishments. We implemented a partial adjustment model that accounts for spillover effects between counties, unknown forms of heteroskedasticity, and spatial autocorrelation. The steady-state equilibrium birth and death rates converged to 6.8 percent and 6.1 percent per year, respectively, during the 2000–06 period. We found that firm birth and death were not decisively affected by a creative destruction process during that period, but firm birth and death positively affect the survival (or persistence) rate of single-unit manufacturing firms.

Suggested Citation

  • Jason P. Brown & Dayton M. Lambert & Raymond J. G. M. Florax, 2013. "The Birth, Death, and Persistence of Firms: Creative Destruction and the Spatial Distribution of U.S. Manufacturing Establishments, 2000–2006," Economic Geography, Taylor & Francis Journals, vol. 89(3), pages 203-226, July.
    • Handle: RePEc:taf:recgxx:v:89:y:2013:i:3:p:203-226
    DOI: 10.1111/ecge.12014
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    Cited by:

    1. Dayton M. Lambert, 2020. "Dynamic panel estimation of a regional adjustment model with spatial-temporal robust covariance," Letters in Spatial and Resource Sciences, Springer, vol. 13(3), pages 245-265, December.
    2. Daragh O’Leary, 2024. "Firm interrelationships: the role of firm size," Letters in Spatial and Resource Sciences, Springer, vol. 17(1), pages 1-13, December.
    3. Julián Ramajo & Alejandro Ricci-Risquete & Lourdes Jerez & Geoffrey J. D. Hewings, 2020. "Impacts of Neighbors on Local Tax Rates: A Space–Time Dynamic Panel Data Analysis," International Regional Science Review, , vol. 43(1-2), pages 105-127, January.
    4. Gintarė Morkutė & Sierdjan Koster & Jouke Van Dijk, 2017. "Employment growth and inter-industry job reallocation: spatial patterns and relatedness," Regional Studies, Taylor & Francis Journals, vol. 51(6), pages 958-971, June.
    5. Janeski, Ivica & Whitacre, Brian E., 2014. "Long-Term Economic Impacts of USDA Water and Sewer Infrastructure Investments in Oklahoma," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 46(1), pages 21-39, February.
    6. Jacob Rubæk Holm & Christian Richter Østergaard & Thomas Roslyng Olesen, 2017. "Destruction And Reallocation Of Skills Following Large Company Closures," Journal of Regional Science, Wiley Blackwell, vol. 57(2), pages 245-265, March.
    7. Tessa Conroy & Steven Deller, 2023. "I will survive…but at what (opportunity) cost?: A spatial analysis of business survival and Jacobian externalities," Growth and Change, Wiley Blackwell, vol. 54(2), pages 550-571, June.
    8. Anil Rupasingha & Kyungsoon Wang, 2017. "Access to capital and small business growth: evidence from CRA loans data," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 59(1), pages 15-41, July.
    9. Gerke J. Hoogstra & Jouke van Dijk & Raymond J. G. M. Florax, 2017. "Do jobs follow people or people follow jobs? A meta-analysis of Carlino–Mills studies," Spatial Economic Analysis, Taylor & Francis Journals, vol. 12(4), pages 357-378, October.
    10. Craig W. Carpenter & Anders Van Sandt & Rebekka Dudensing & Scott Loveridge, 2022. "Profit Pools and Determinants of Potential County-Level Manufacturing Growth," International Regional Science Review, , vol. 45(2), pages 188-224, March.
    11. Sarah A. Low & Jason P. Brown, 2017. "Manufacturing Plant Survival in a Period of Decline," Growth and Change, Wiley Blackwell, vol. 48(3), pages 297-312, September.
    12. repec:ags:joaaec:163192 is not listed on IDEAS

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