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Competitors, Complementors, Parents and Places: Explaining Regional Agglomeration in the U.S. Auto Industry

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Listed:
  • Cabral, Luís M B
  • Wang, Zhu
  • Xu, Yi (Daniel)

Abstract

Taking the early U.S. automobile industry as an example, we evaluate four competing hypotheses on regional industry agglomeration: intra-industry local externalities, inter-industry local externalities, employee spinouts, and location fixed-effects. Our findings suggest that inter-industry spillovers, particularly the development of the carriage and wagon industry, play an important role. Spinouts play a secondary role and only contribute to agglomeration at later stages of industry evolution. The presence of other firms in the same industry has a negligible (or maybe even negative) effect on agglomeration. Finally, location fixed-effects account for some agglomeration, though to a lesser extent than inter-industry spillovers and spinouts.

Suggested Citation

  • Cabral, Luís M B & Wang, Zhu & Xu, Yi (Daniel), 2013. "Competitors, Complementors, Parents and Places: Explaining Regional Agglomeration in the U.S. Auto Industry," CEPR Discussion Papers 9435, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:9435
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    References listed on IDEAS

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    More about this item

    Keywords

    Employee spinouts; Industry agglomeration; Local externalities;

    JEL classification:

    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • L0 - Industrial Organization - - General
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics

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