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Evolving agglomeration in the U.S. auto supplier industry

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  • Thomas H. Klier
  • Daniel P. McMillen

Abstract

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.

Suggested Citation

  • Thomas H. Klier & Daniel P. McMillen, 2006. "Evolving agglomeration in the U.S. auto supplier industry," Working Paper Series WP-06-20, Federal Reserve Bank of Chicago.
    • Handle: RePEc:fip:fedhwp:wp-06-20
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    References listed on IDEAS

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    1. Gilles Duranton & Henry G. Overman, 2008. "Exploring The Detailed Location Patterns Of U.K. Manufacturing Industries Using Microgeographic Data," Journal of Regional Science, Wiley Blackwell, vol. 48(1), pages 213-243, February.
    2. Smith Jr. , Donald F. & Florida Richard, 1994. "Agglomeration and Industrial Location: An Econometric Analysis of Japanese-Affiliated Manufacturing Establishments in Automotive-Related Industries," Journal of Urban Economics, Elsevier, vol. 36(1), pages 23-41, July.
    3. Case, Anne, 1992. "Neighborhood influence and technological change," Regional Science and Urban Economics, Elsevier, vol. 22(3), pages 491-508, September.
    4. Kurt J. Beron & Wim P. M. Vijverberg, 2004. "Probit in a Spatial Context: A Monte Carlo Analysis," Advances in Spatial Science, in: Luc Anselin & Raymond J. G. M. Florax & Sergio J. Rey (ed.), Advances in Spatial Econometrics, chapter 8, pages 169-195, Springer.
    5. Gilles Duranton & Henry G. Overman, 2005. "Testing for Localization Using Micro-Geographic Data," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 72(4), pages 1077-1106.
    6. Pinkse, Joris & Slade, Margaret E., 1998. "Contracting in space: An application of spatial statistics to discrete-choice models," Journal of Econometrics, Elsevier, vol. 85(1), pages 125-154, July.
    7. 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.
    8. Thomas H. Klier & Daniel P. McMillen, 2006. "The geographic evolution of the U.S. auto industry (pt. 2)," Economic Perspectives, Federal Reserve Bank of Chicago, vol. 30(Q II), pages 7-13.
    9. Thomas H. Klier & Daniel P. McMillen, 2006. "The geographic evolution of the U.S. auto industry (pt. 1)," Economic Perspectives, Federal Reserve Bank of Chicago, vol. 30(Q II), pages 2-6.
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