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Evolving agglomeration in the U.S. auto supplier industry

  • Thomas H. Klier
  • Daniel McMillen

Using nonparametric descriptive tools developed by Duranton and Overman (2005), we show that both new and old auto supplier plants are highly concentrated in the eastern United States. Conditional logit models imply that much of this concentration can be explained parametrically by distance from Detroit, proximity to assembly plants, and access to the interstate highway system. New plants are more likely to be located in zip codes that are close to existing supplier plants. However, the degree of clustering observed is still greater than implied by the logit estimates.

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Paper provided by Federal Reserve Bank of Chicago in its series Working Paper Series with number WP-06-20.

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Date of creation: 2006
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Handle: RePEc:fip:fedhwp:wp-06-20
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  1. Gilles Duranton & Henry Overman, 2006. "Exploring the Detailed Location Patterns of UK Manufacturing Industries Using Microgeographic Data," CEP Discussion Papers dp0756, Centre for Economic Performance, LSE.
  2. Ellison, G. & Glaeser, E.L., 1994. "Geographic Concentration in U.S. Manufacturing Industries: A Dartboard Approach," Working papers 94-27, Massachusetts Institute of Technology (MIT), Department of Economics.
  3. Duranton, Gilles & Henry G Overman, 2003. "Testing for Localisation Using Micro-Geographic Data," Royal Economic Society Annual Conference 2003 69, Royal Economic Society.
  4. Thomas H. Klier & Daniel McMillen, 2006. "The geographic evolution of the U.S. auto industry (pt. 1)," Economic Perspectives, Federal Reserve Bank of Chicago, issue Q II, pages 2-6.
  5. Case, Anne, 1992. "Neighborhood influence and technological change," Regional Science and Urban Economics, Elsevier, vol. 22(3), pages 491-508, September.
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