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Geographic redistribution of U.S. manufacturing and the role of state development policy

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Author Info
Yoonsoo Lee

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Abstract

Competition among state and local governments to lure businesses has attracted considerable interest from economists, as well as legislators and policymakers. This paper quantifies the role of plant relocations in the geographic redistribution of manufacturing employment and examines the effectiveness of state development policy. Only a few studies have looked at how manufacturing firms geographically locate their production facilities and have used either small manufacturing samples or small geographic regions. This paper provides broader evidence of the impact of plant relocations using confidential establishment level data from the U.S. Census Longitudinal Research Database (LRD), covering the full population of manufacturing establishments in the United States over the period 1972 to 1992. This paper finds a relatively small role for relocation in explaining the disparity of manufacturing employment growth rates across states. Moreover, it finds evidence of very weak effects of incentive programs on plant relocations.

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Paper provided by Federal Reserve Bank of Cleveland in its series Working Paper with number 0415.

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Date of creation: 2004
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Handle: RePEc:fip:fedcwp:0415

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Keywords: Industrial location Manufactures Regional planning

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Erickson, Rodney A. & Wasylenko, Michael, 1980. "Firm relocation and site selection in suburban municipalities," Journal of Urban Economics, Elsevier, vol. 8(1), pages 69-85, July. [Downloadable!] (restricted)
  2. Robert Walker & David Greenstreet, 1991. "The Effect of Government Incentives and Assistance on Location and Job Growth in Manufacturing," Regional Studies, Taylor and Francis Journals, vol. 25(1), pages 13-30, February. [Downloadable!] (restricted)
  3. Evans, David S, 1987. "Tests of Alternative Theories of Firm Growth," Journal of Political Economy, University of Chicago Press, vol. 95(4), pages 657-74, August. [Downloadable!] (restricted)
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  4. Peter S. Fisher, 1997. "Tax and spending incentives and enterprise zones," New England Economic Review, Federal Reserve Bank of Boston, issue Mar, pages 109-138. [Downloadable!]
  5. Olivier Jean Blanchard & Lawrence F. Katz, 1992. "Regional Evolutions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 23(1992-1), pages 1-76. [Downloadable!]
  6. Todd M. Gabe & David S. Kraybill, 2002. "The Effect of State Economic Development Incentives on Employment Growth of Establishments," Journal of Regional Science, Blackwell Publishing, vol. 42(4), pages 703-730. [Downloadable!] (restricted)
  7. Dunne, T. & Roberts, M.J. & Samuelson, L., 1988. "Pattenrs Of Firm Entry And Exit In U.S. Manufacturing Industries," Papers 1-88-2, Pennsylvania State - Department of Economics.
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  8. Scott Schuh & Robert K. Triest, 1999. "Gross job flows and firms," Working Papers 99-10, Federal Reserve Bank of Boston. [Downloadable!]
  9. Timothy J. Bartik, 2003. "Local Economic Development Policies," Staff Working Papers 03-91, W.E. Upjohn Institute for Employment Research. [Downloadable!] (restricted)
  10. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June. [Downloadable!] (restricted)
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  11. Topel, Robert H, 1986. "Local Labor Markets," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages S111-43, June. [Downloadable!] (restricted)
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  1. Miguel C. Manjon-Antolin & Josep Maria Arauzo-Carod, 2006. "Locations and Relocations: Modelling, Determinants, and Interrelations," ERSA conference papers ersa06p33, European Regional Science Association. [Downloadable!]
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