What Affects Firm Location and Firm Employment at State Borders?

Georgeanne Artz, Yulong Chen, Liyuan Ma and Peter Orazem

Center for Agricultural and Rural Development (CARD) Publications from Center for Agricultural and Rural Development (CARD) at Iowa State University

Abstract: What makes some places grow and some places stagnate or decline? There are many politicians, economic development specialists, and regional planning experts who claim they hold the keys to economic growth, and yet there is great persistence in the strength of local economies over very long time periods. The five states with the lowest labor productivity in 1974 were Mississippi, South Carolina, Vermont, Arkansas, and Maine. By 2015, all of these states were still ranked among the bottom six states. As wages follow labor productivity, these states also ranked among the bottom ten in average earnings per job over the 41-year period. Surely if there were some magic elixir that spurred economic growth, at least one of these states would have broken out from the bottom of the pack. Perhaps the only ones benefiting from the development advice are the advisers.

Date: 2019-07
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Persistent link: https://EconPapers.repec.org/RePEc:ias:cpaper:apr-spring-2019-1

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