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Agglomeration in the European Automobile Supplier Industry

Author

Listed:
  • Thomas H. Klier
  • Daniel P. McMillen

    (University of Illinois at Urbana-Champaign)

Abstract

Motor vehicle and motor vehicle parts production plants tend to exhibit a strong degree of agglomeration. This paper estimates a spatial model utilizing detailed plant-level data that is pooled across seven countries in Europe. The paper makes several contributions. First, we assemble a set of nearly 1,800 European plant locations of the largest motor vehicle parts suppliers, as well as the location of all light vehicle assembly plants operational in 2010. Second, we obtain detailed spatial data ? at a higher resolution than what is provided by the NUTS-3 regions ? for five European countries (France, Spain, Italy, Poland, and the Czech Republic). For the U.K. (ward level) and Germany (community level) we acquired spatial data at an even more detailed level. These seven countries are home to over 70% of the plants in our data set. The ability to pool data from multiple countries allows us to estimate a location model for a large share of the vehicle parts industry, an industry that extends across all of Europe. The modeling results suggest that the main forces of agglomeration in the European auto supplier sector are (1) highway access (connecting supplier plants as well as suppliers and their downstream customers, the assembly plants), (2) the desire to locate near assembly plants, (3) as well as near other parts producing plants.

Suggested Citation

  • Thomas H. Klier & Daniel P. McMillen, 2013. "Agglomeration in the European Automobile Supplier Industry," Working Paper Series WP-2013-15, Federal Reserve Bank of Chicago.
  • Handle: RePEc:fip:fedhwp:wp-2013-15
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    References listed on IDEAS

    as
    1. Yannick Lung, 2004. "The changing geography of the European automobile system," International Journal of Automotive Technology and Management, Inderscience Enterprises Ltd, vol. 4(2/3), pages 137-165.
    2. Gilles Duranton & Henry G. Overman, 2005. "Testing for Localization Using Micro-Geographic Data," Review of Economic Studies, Oxford University Press, vol. 72(4), pages 1077-1106.
    3. 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.
    4. Vincent Frigant & Jean-Bernard Layan, 2009. "Modular production and the new division of labour within Europe: the perspective of French automotive parts suppliers," Post-Print hal-00381341, HAL.
    5. Thomas Klier & Daniel P. McMillen, 2008. "Evolving Agglomeration In The U.S. Auto Supplier Industry," Journal of Regional Science, Wiley Blackwell, vol. 48(1), pages 245-267, February.
    6. 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, issue qii, pages 2-6.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Vincent FRIGANT & Martin ZUMPE, 2014. "The persistent heterogeneity of trade patterns: A comparison of four European Automotive Global Production Networks," Cahiers du GREThA 2014-24, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).
    2. Rodet-Kroichvili, Nathalie & Heim, Stéphane & Woessner, Raymond, 2014. "Internationalisation de la recherche et développement : quelles stratégies des constructeurs automobiles dans l’espace est-européen et méditerranéen ?," Revue de la Régulation - Capitalisme, institutions, pouvoirs, Association Recherche et Régulation, vol. 15.
    3. Thomas H. Klier, 2015. "Auto Production Footprints: Comparing Europe and North America," Economic Perspectives, Federal Reserve Bank of Chicago, pages 101-119.
    4. Frigant, Vincent & Zumpe, Martin, 2014. "Are automotive global production networks becoming more global? Comparison of regional and global integration processes based on auto parts trade data," MPRA Paper 55727, University Library of Munich, Germany.
    5. Vincent Frigant & Stéphane Miollan, 2014. "The Geographical Restructuring of the European Automobile Industry in the 2000s," Working Papers hal-02150630, HAL.
    6. Vincent Frigant & Stéphane Miollan, 2014. "La restructuration de la géographie de l'industrie automobile en Europe dans les années 2000," Working Papers hal-00935325, HAL.

    More about this item

    Keywords

    Automobile production; plant location;

    JEL classification:

    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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