Competitors, Complementors, Parents and Place: Explaining Regional Agglomeration in the U.S. Auto Industry

33 Pages Posted: 24 Apr 2013

See all articles by Luis M. B. Cabral

Luis M. B. Cabral

New York University (NYU) - Leonard N. Stern School of Business - Department of Economics; Centre for Economic Policy Research (CEPR)

Zhu Wang

Federal Reserve Banks - Federal Reserve Bank of Richmond

Daniel Yi Xu

Duke University

Date Written: April 2013

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: local externalities; employee spinouts; industry agglomeration

Suggested Citation

Cabral, Luis M. B. and Wang, Zhu and Xu, Daniel Yi, Competitors, Complementors, Parents and Place: Explaining Regional Agglomeration in the U.S. Auto Industry (April 2013). NYU Working Paper No. 2451/31760. Available at SSRN: https://ssrn.com/abstract=2255883

Luis M. B. Cabral (Contact Author)

New York University (NYU) - Leonard N. Stern School of Business - Department of Economics ( email )

269 Mercer Street
New York, NY 10003
United States
212-998-0858 (Phone)
212-998-4218 (Fax)

HOME PAGE: http://www.stern.nyu.edu/~lcabral

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Zhu Wang

Federal Reserve Banks - Federal Reserve Bank of Richmond ( email )

P.O. Box 27622
Richmond, VA 23261
United States

Daniel Yi Xu

Duke University

100 Fuqua Drive
Durham, NC 27708-0204
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
15
Abstract Views
436
PlumX Metrics