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Localization Of Industry And Vertical Disintegration

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  • Thomas J. Holmes

Abstract

Theory suggests that vertical disintegration should be greater in areas where industries localize. This paper provides some evidence that this implication is true for the U.S. manufacturing sector. Purchased inputs as a percent of the value of output is used as a measure of vertical disintegration. To measure the localization of industry, for each manufacturing plant the amount of employment in neighboring plants in the same industry is determined. © 1999 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology

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  • Thomas J. Holmes, 1999. "Localization Of Industry And Vertical Disintegration," The Review of Economics and Statistics, MIT Press, vol. 81(2), pages 314-325, May.
  • Handle: RePEc:tpr:restat:v:81:y:1999:i:2:p:314-325
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    References listed on IDEAS

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    1. Adam B. Jaffe & Manuel Trajtenberg & Rebecca Henderson, 1993. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," The Quarterly Journal of Economics, Oxford University Press, vol. 108(3), pages 577-598.
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    6. Ellison, Glenn & Glaeser, Edward L, 1997. "Geographic Concentration in U.S. Manufacturing Industries: A Dartboard Approach," Journal of Political Economy, University of Chicago Press, vol. 105(5), pages 889-927, October.
    7. Henderson, J. Vernon, 1986. "Efficiency of resource usage and city size," Journal of Urban Economics, Elsevier, vol. 19(1), pages 47-70, January.
    8. Locay, Luis, 1990. "Economic Development and the Division of Production between Households and Markets," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 965-982, October.
    9. M. A. Adelman, 1955. "Concept and Statistical Measurement of Vertical Integration," NBER Chapters,in: Business Concentration and Price Policy, pages 281-330 National Bureau of Economic Research, Inc.
    10. George J. Stigler, 1951. "The Division of Labor is Limited by the Extent of the Market," Journal of Political Economy, University of Chicago Press, vol. 59, pages 185-185.
    11. George J. Stigler, Chairman, Universities-National Bureau Committee for Economic Research, 1955. "Business Concentration and Price Policy," NBER Books, National Bureau of Economic Research, Inc, number univ55-1, April.
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