Multiregional Firms and Region Switching in the US Manufacturing Sector
Antoine Gervais ()
Working Papers from U.S. Census Bureau, Center for Economic Studies
This paper uses data on US manufacturing firms to study a new extensive margin, the reallocation of resources that takes place within surviving firms as they open and close establishments in different regions. To motivate the empirical analysis, I extend existing models of industry dynamics to include production-location decisions within firms. The empirical results provide support for the mechanisms emphasized by the theoretical model. In the data, only about 3 percent of firms make the same product in more than one region, but these multiregional firms are more productive on average compared to single-region firms, and they account for about two-thirds of output. The results also show that "region-switching" is pervasive among multiregional firms, is correlated with changes in firm characteristics, and leads to a more efficient allocation of resources within firms.
Keywords: Multiregional firms; firm heterogeneity; industry dynamics; monopolistic competition; proximity-concentration tradeoff. (search for similar items in EconPapers)
JEL-codes: L2 (search for similar items in EconPapers)
Pages: 50 pages
New Economics Papers: this item is included in nep-bec, nep-cse, nep-geo and nep-ind
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https://www2.census.gov/ces/wp/2015/CES-WP-15-22.pdf First version, 2015 (application/pdf)
Journal Article: MULTIREGIONAL FIRMS AND REGION SWITCHING IN THE U.S. MANUFACTURING SECTOR (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:cen:wpaper:15-22
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