The Determinants of Plant Exit: the Evolution of the U.S. Refining Industry

David W. Meyer and Christopher T. Taylor ()
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David W. Meyer: US FTC
Christopher T. Taylor: US FTC

Journal of Industry, Competition and Trade, 2018, vol. 18, issue 4, No 1, 429-448

Abstract: Abstract This paper analyzes the exit and expansion of U.S. petroleum refineries using plant-level data from 1947 to 2013. We find that small refineries and refineries owned by a multi-plant firm are more likely to close. If a multi-plant firm closes a refinery, it closes a smaller one. Unlike previous research, we find no clear relationship between a firm’s share of national refining capacity and the probability of refinery exit. We also find that refineries close when the industry as a whole has low capacity utilization. In total, firms close small, likely inefficient, refineries when refinery utilization is low.

Keywords: Refining; Multinomial Probit; Plant exit; Multi-plant coordination (search for similar items in EconPapers)
JEL-codes: L11 L71 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s10842-018-0273-8

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