Working Paper: NBER ID: w18973
Authors: Lus Cabral; Zhu Wang; Daniel Yi Xu
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.
Keywords: agglomeration; spillovers; auto industry; regional economics
JEL Codes: L26; L6; R1
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| interindustry spillovers (L69) | agglomeration (R11) |
| spinouts (M13) | agglomeration (R11) |
| local input resources (Q21) | agglomeration (R11) |
| familial relationships (J12) | spinout success (Y60) |
| intraindustry effects (L19) | firm performance (L25) |