Regional Business Climate and Interstate Manufacturing Relocation Decisions

Tessa Conroy, Steven Deller () and Alexandra Tsvetkova

MPRA Paper from University Library of Munich, Germany

Abstract: Using a panel (2000-2011) of cross-state relocation patterns of manufacturing firms from the National Establishment Time Series (NETS) database we estimate a state-to-state relocation model for all manufacturers and separately for three groups of industries defined by knowledge intensity. The analysis of the data suggests that very few manufacturing firms relocate across state lines in any given year and the vast majority of those that do are small in size and move to adjoining states. Econometric results reveal that regional determinants of relocation decisions vary by type of manufacturing firm. Whereas a number of factors considered in this study are significant in the models, estimated marginal effects at the mean are infinitesimal. This implies that states attempting to encourage manufacturing firms to relocate from other states via traditional perspectives on business climate are unlikely to be successful.

Keywords: business climate; manufacturing; firm relocation (search for similar items in EconPapers)
JEL-codes: L6 O25 R3 (search for similar items in EconPapers)
Date: 2015-09-16
New Economics Papers: this item is included in nep-cse and nep-ure
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https://mpra.ub.uni-muenchen.de/66748/1/MPRA_paper_66748.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/72350/8/MPRA_paper_72350.pdf revised version (application/pdf)

Related works:
Journal Article: Regional business climate and interstate manufacturing relocation decisions (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:66748

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