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Short-run Birth and Death of U.S. Manufacturing Firms: 2000 - 2005

  • Brown, Jason P.
  • Lambert, Dayton M.

Attracting manufacturing investment remains a viable regional development policy. Previous research in the location literature has informed policymakers which factors are most important for attracting new firm investment. Far less is known about the dynamics of firm death and the possible interaction with firm birth. A conceptual model of county-level investment in the U.S. manufacturing sector is developed from location theory and subsequent literature. Specifically, we test the relative importance of location factors influencing firm investment, and if these factors influence firm birth and death differently. Local factors include labor quality, availability, and cost, market conditions, agglomeration due to localization and urbanization economies, infrastructure, and fiscal policy. This study covers the time period 2000 to 2004 for U.S. counties in the lower 48 states. Firm data are from the U.S. Census Bureau’s Dynamic Firm Data Series, which links establishments across space and time. Regional adjustment models are used to show how ceteris paribus changes in location factors affect the birth and death rates in a county.

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Paper provided by Southern Agricultural Economics Association in its series 2009 Annual Meeting, January 31-February 3, 2009, Atlanta, Georgia with number 46739.

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Date of creation: 2009
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Handle: RePEc:ags:saeana:46739
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  1. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth Through Creative Destruction," Scholarly Articles 12490578, Harvard University Department of Economics.
  2. Thomas de Graaff & Raymond J.C.M. Florax & Peter Nijkamp & Aura Reggiani, 2001. "A General Misspecification Test for Spatial Regression Models: Dependence, Heterogeneity, and Nonlinearity," Journal of Regional Science, Wiley Blackwell, vol. 41(2), pages 255-276.
  3. Aghion, P. & Howitt, P., 1989. "A Model Of Growth Through Creative Destruction," UWO Department of Economics Working Papers 8904, University of Western Ontario, Department of Economics.
  4. Andrew B Bernard & J. Bradford Jensen, 2007. "Firm Structure, Multinationals, and Manufacturing Plant Deaths," The Review of Economics and Statistics, MIT Press, vol. 89(2), pages 193-204, May.
  5. Ericson, Richard & Pakes, Ariel, 1995. "Markov-Perfect Industry Dynamics: A Framework for Empirical Work," Review of Economic Studies, Wiley Blackwell, vol. 62(1), pages 53-82, January.
  6. Sanghoon Ahn, 2001. "Firm Dynamics and Productivity Growth: A Review of Micro Evidence from OECD Countries," OECD Economics Department Working Papers 297, OECD Publishing.
  7. Eric Bartelsman & Stefano Scarpetta & Fabiano Schivardi, 2003. "Comparative Analysis of Firm Demographics and Survival: Micro-Level Evidence for the OECD Countries," OECD Economics Department Working Papers 348, OECD Publishing.
  8. John I. Carruthers & Alexander C. Vias, 2005. "Urban, Suburban, and Exurban Sprawl in the Rocky Mountain West: Evidence from Regional Adjustment Models," Journal of Regional Science, Wiley Blackwell, vol. 45(1), pages 21-48.
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