Evolving Agglomeration in the U.S. Auto Supplier Industry
43 Pages Posted: 6 Dec 2006
Date Written: November 2006
Using nonparametric descriptive tools developed by Duranton and Overman (2005), we show that both new and old auto supplier plants are highly concentrated in the eastern United States. Conditional logit models imply that much of this concentration can be explained parametrically by distance from Detroit, proximity to assembly plants, and access to the interstate highway system. New plants are more likely to be located in zip codes that are close to existing supplier plants. However, the degree of clustering observed is still greater than implied by the logit estimates.
Keywords: Spatial econometrics, non-parametric statistics, agglomeration, plant location, auto supplier industry
JEL Classification: R30, R15, L62
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