Competitors, complementors, parents and places: Explaining regional agglomeration in the U.S. auto industry

Luis Cabral, Zhu Wang and Daniel Yi Xu

No 13-04, Working Paper from Federal Reserve Bank of Richmond

Abstract: Taking the early U.S. automobile industry as an example, we evaluate four competing hypotheses on regional industry agglomeration: intra-industry local externalities, inter-industry local externalities, employee spinouts, and location fixed-effects. Our findings suggest that inter-industry spillovers, particularly the development of the carriage and wagon industry, play an important role. Spinouts play a secondary role and only contribute to agglomeration at later stages of industry evolution. The presence of other firms in the same industry has a negligible (or maybe even negative) effect on agglomeration. Finally, location fixed-effects account for some agglomeration, though to a lesser extent than inter-industry spillovers and spinouts.

Keywords: Economic growth; Regional economics; Automobile industry and trade (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-cse, nep-geo, nep-hme, nep-tre and nep-ure
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Related works:
Journal Article: Competitor, Complementors, Parents and Places: Explaining Regional Agglomeration in the U.S. Auto Industry (2018)
Working Paper: Competitors, Complementors, Parents and Places: Explaining Regional Agglomeration in the U.S. Auto Industry (2013)
Working Paper: Competitors, Complementors, Parents and Places: Explaining Regional Agglomeration in the U.S. Auto Industry (2013)
Working Paper: Competitors, Complementors, Parents and Places: Explaining Regional Agglomeration in the U.S. Auto Industry (2013)
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