Investment and Disinvestment in New York, 1960-80

Glenn Yago, Hyman Korman, Sen-Yuan Wu and Michael Schwartz

The ANNALS of the American Academy of Political and Social Science, 1984, vol. 475, issue 1, 28-38

Abstract: Job loss and plant closings have, until recently, been considered part of the inevitable cycle adjustments of economic growth. Since the late 1970s, however, a multifaceted debate has developed relating to the possible permanence of industrial decline in the American Northeast. Postindustrial and product life-cycle theories maintain an optimistic perspective predicting offsetting job gains in new sectors; while capital mobility theory predicts accelerated job loss and long-term depression. Evidence from the New York State Industrial Migration File offers little cause for optimism. Between 1960 and 1980, state job capacity declined by 200,000, a result of both an increase in disinvestment and a decrease in new investment. Contraction took place in every region and industrial sector. There is questionable evidence of compensatory expansion to offset contraction during most years as a consequence of physical changes in plant and equipment investment. Multilocal firms showed a much greater propensity to disinvest than local firms, suggesting support for capital mobility theory.

Date: 1984
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Persistent link: https://EconPapers.repec.org/RePEc:sae:anname:v:475:y:1984:i:1:p:28-38

DOI: 10.1177/0002716284475001003

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