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

40 Pages Posted: 13 Aug 2014 Last revised: 7 May 2018

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

Multiple version iconThere are 2 versions of this paper

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 work as a special type of intra-industry spillovers. The presence of other firms in the same industry has a negligible (or even negative) effect. Finally, local inputs account for some agglomeration in the short run, but the effects are much more profound in the long run.

Suggested Citation

Cabral, Luis M. B. and Wang, Zhu and Yi Xu, Daniel, Competitors, Complementors, Parents and Places: Explaining Regional Agglomeration in the U.S. Auto Industry (April 2013). NBER Working Paper No. w18973. Available at SSRN: https://ssrn.com/abstract=2479719

Luis M. B. Cabral (Contact Author)

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

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

Centre for Economic Policy Research (CEPR)

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Zhu Wang

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

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Richmond, VA 23261
United States

Daniel Yi Xu

Duke University ( email )

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Durham, NC 27708-0204
United States

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