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

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  • Luis Cabral
  • Zhu Wang
  • Daniel Yi Xu

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 work as a special type of intra-industry spillovers. The presence of other firms in the same industry has a negligible (or even negative) effect. Finally, local inputs account for some agglomeration in the short run, but the effects are much more profound in the long run.
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Suggested Citation

  • Luis Cabral & Zhu Wang & Daniel Yi Xu, 2013. "Competitors, Complementors, Parents and Places: Explaining Regional Agglomeration in the U.S. Auto Industry," Working Papers 13-05, New York University, Leonard N. Stern School of Business, Department of Economics.
    • Handle: RePEc:ste:nystbu:13-05
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    References listed on IDEAS

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    Cited by:

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    2. Abebe, Girum & McMillan, Margaret & Serafinelli, Michel, 2022. "Foreign direct investment and knowledge diffusion in poor locations," Journal of Development Economics, Elsevier, vol. 158(C).
    3. Theophilus Lartey & Diana Owusu Yirenkyi & Samuel Adomako & Albert Danso & Joseph Amankwah‐Amoah & Ashraful Alam, 2020. "Going green, going clean: Lean‐green sustainability strategy and firm growth," Business Strategy and the Environment, Wiley Blackwell, vol. 29(1), pages 118-139, January.
    4. repec:spo:wpmain:info:hdl:2441/2c47q6gpge8vrbqjak551kmu6c is not listed on IDEAS
    5. Maurizio Iacopetta & Raoul Minetti & Pierluigi Murro, 2020. "Growing through Spinoffs. Corporate Governance, Entry, and Innovation," Documents de Travail de l'OFCE 2020-13, Observatoire Francais des Conjonctures Economiques (OFCE).
    6. Hanlon, W.Walker & Heblich, Stephan, 2022. "History and urban economics," Regional Science and Urban Economics, Elsevier, vol. 94(C).
    7. repec:hal:spmain:info:hdl:2441/2c47q6gpge8vrbqjak551kmu6c is not listed on IDEAS
    8. Iacopetta, Maurizio & Minetti, Raoul & Murro, Pierluigi, 2024. "Growing through spinoffs. Corporate governance, entry dynamics, and innovation," Journal of Economic Dynamics and Control, Elsevier, vol. 161(C).
    9. Wei Han & Ying Zhang & Jianming Cai & Enpu Ma, 2019. "Does Urban Industrial Agglomeration Lead to the Improvement of Land Use Efficiency in China? An Empirical Study from a Spatial Perspective," Sustainability, MDPI, vol. 11(4), pages 1-22, February.
    10. Lukas Kuld & Sara Mitchell & Christiane Hellmanzik, 2021. "Manhattan Transfer: Productivity effects of agglomeration in American authorship," Trinity Economics Papers tep0821, Trinity College Dublin, Department of Economics.
    11. Gomtsyan, David, 2022. "Merchant networks in big cities," Journal of Urban Economics, Elsevier, vol. 129(C).
    12. Boyan Jovanovic & Zhu Wang, 2020. "Idea Diffusion and Property Rights," Working Paper 20-11, Federal Reserve Bank of Richmond.

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    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • L6 - Industrial Organization - - Industry Studies: Manufacturing
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics

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