Manufacturing Transition in Local Economies: A Regional Adjustment Model Report as inadecuate

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This paper addresses changes in capital formation by testing the importance of location factors with respect to the rate of establishment births and deaths in U.S. manufacturing, 2000–2004. A theoretical concept called “localized creative destruction” is tested as a mechanism to explain the dynamics impacting the spatial distribution of manufacturing establishment birth and death rates. While no support of this process was found, results identify a convergence process occurring where counties with high initial birth/death rates have smaller changes in firm birth and death rates. The interpretation is that counties become more equally competitive in terms of firm formation dynamics in lieu of successful counties increasing their lead in the short run. This is potentially relevant to policymakers and economic development practitioners who are concerned with business retention and the impact of new manufacturing establishments on their existing base.

Keywords: location determinants ; manufacturing ; adjustment models

Subject(s): Community/Rural/Urban Development

Issue Date: 2010-04

Publication Type: Conference Paper/ Presentation

PURL Identifier:

Total Pages: 38

JEL Codes: L60; R11; R12

Series Statement: Track Session Paper


Record appears in: Agricultural and Applied Economics Association (AAEA) > 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado

Author: Brown, Jason P. ; Lambert, Dayton M. ; Florax, Raymond J.G.M.



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