The Determinants of Plant Exit: The Evolution of the U.S. Refining Industry

42 Pages Posted: 20 Nov 2015

See all articles by David W. Meyer

David W. Meyer

U.S. Federal Trade Commission - Bureau of Economics

Christopher T. Taylor

U.S. Federal Trade Commission - Bureau of Economics

Date Written: November 1, 2015

Abstract

This paper analyzes factors that affect the exit and expansion of U.S. petroleum refineries using plant-level capacity data from 1947 to 2013. We find that larger refineries are less likely to close and that refineries owned by a multi-plant firm are more likely to close. If a multi-plant firm closes a refinery, it is likely to close its smaller refineries. In contrast to previous literature, we find weak evidence that refineries owned by firms with higher market shares are less likely to close. In specifications with more control variables, this relationship is statistically insignificant.

Keywords: Refining, Multinomial Probit, Plant Exit, Multi-plant Coordination

JEL Classification: L11; L71

Suggested Citation

Meyer, David W. and Taylor, Christopher T., The Determinants of Plant Exit: The Evolution of the U.S. Refining Industry (November 1, 2015). Available at SSRN: https://ssrn.com/abstract=2692259 or http://dx.doi.org/10.2139/ssrn.2692259

David W. Meyer (Contact Author)

U.S. Federal Trade Commission - Bureau of Economics ( email )

600 Pennsylvania Ave., NW
Washington, DC 20580
United States

Christopher T. Taylor

U.S. Federal Trade Commission - Bureau of Economics ( email )

601 Pennsylvania Avenue, NW
Antitrust Division
Washington, DC 20580
United States

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