Short-run Birth and Death of U.S. Manufacturing Firms: 2000 - 2005

Attracting manufacturing investment remains a viable regional development policy. Previous research in the location literature has informed policymakers which factors are most important for attracting new firm investment. Far less is known about the dynamics of firm death and the possible interaction with firm birth. A conceptual model of county-level investment in the U.S. manufacturing sector is developed from location theory and subsequent literature. Specifically, we test the relative importance of location factors influencing firm investment, and if these factors influence firm birth and death differently. Local factors include labor quality, availability, and cost, market conditions, agglomeration due to localization and urbanization economies, infrastructure, and fiscal policy. This study covers the time period 2000 to 2004 for U.S. counties in the lower 48 states. Firm data are from the U.S. Census Bureau’s Dynamic Firm Data Series, which links establishments across space and time. Regional adjustment models are used to show how ceteris paribus changes in location factors affect the birth and death rates in a county.location factors, manufacturing, creative destruction, Community/Rural/Urban Development, L60, R11, R12,

Autocracy, democracy, bureaucracy, or monopoly: can you judge a government by its size?

We develop a simple theoretical framework to examine on an integrated basis how the form of government affects its power and size. The analytical framework abstracts from distortions that arise from the means ofgovernment finance and separates government power into two dimensions-pure coercive power and pure monopoly power. A government can exert its coercive power to shift the demand for its services outward and/or its monopoly power to restrict the output along a given demand curve to earn rents. Among the implications drawn from the analysis are that government officials have an incentive to provide a non-optimal combination of taxes and services, and that neither size nor rents alone are reliable indicators of the extent to which government fails to achieve optimality in its provision of services.Finance ; Power resources

EVOLUTION OF INVESTMENT FLOWS IN U.S. MANUFACTURING:A SPATIAL PANEL APPROACH

The paper starts with a discussion of a conceptual model of location factors in U.S. manufacturing investment at the state level. The purpose of the paper is to test the relative importance of growth factors influencing investment and whether or not they have changed in importance over time. These factors include agglomeration, market structure, labor, infrastructure, and fiscal policy. A better understanding of investment flows in the manufacturing sector will help determine how growth factors have changed over time and which economic development policies may be most appropriate at targeting the sector. The analysis covers the time period 1994 to 2006 for the 48 contiguous states, with data taken from the Annual Survey of Manufactures, the Bureau of Economic Analysis, and the Bureau of Labor Statistics. Panel methods are used to test for fixed effects due to heterogeneity across states. Spatial panel methods with time effects are used for determination and specification of spatial and temporal effects. Empirical results are consistent across the empirical models put forth. Results suggest that market demand remains one of the most important location factors of manufacturing investment. Investment also goes to states with more productive labor and localized agglomeration of manufacturing activity.manufacturing, investment, location factors

DETERMINANTS OF INVESTME??T FLOWS IN U.S. MANUFACTURING

The purpose of the paper is to test the long-run steady state of growth factors hypothesized to influence U.S. manufacturing investment flows. These factors include agglomeration, market structure, labor, infrastructure, and fiscal policy. Spatial cross-regressive and spatial Durbin models are used to measure the spatial interaction of investment flows. Spatial spillovers are found to be of a competitive nature at the state level, implying that a factor which attracts more investment to a particular state is associated with lower investments in neighboring states. Investment flows to states with higher market demand, more productive labor, and more localized agglomeration of manufacturing activity.manufacturing, investment, spatial Durbin model

A TWO-STEP ESTIMATOR FOR A SPATIAL LAG MODEL OF COUNTS: THEORY, SMALL SAMPLE PERFORMANCE AND AN APPLICATION

Several spatial econometric approaches are available to model spatially correlated disturbances in count models, but there are at present no structurally consistent count models incorporating spatial lag autocorrelation. A two-step, limited information maximum likelihood estimator is proposed to fill this gap. The estimator is developed assuming a Poisson distribution, but can be extended to other count distributions. The small sample properties of the estimator are evaluated with Monte Carlo experiments. Simulation results suggest that the spatial lag count estimator achieves gains in terms of bias over the aspatial version as spatial lag autocorrelation and sample size increase. An empirical example deals with the location choice of single-unit start-up firms in the manufacturing industry in the US between 2000 and 2004. The empirical results suggest that in the dynamic process of firm formation, counties dominated by firms exhibiting (internal) increasing returns to scale are at a relative disadvantage even if localization economies are presentcount model, location choice, manufacturing, Poisson, spatial econometrics

Manufacturing Transition in Local Economies: A Regional Adjustment Model

This paper addresses changes in capital formation by testing the importance of location factors with respect to the rate of establishment births and deaths in U.S. manufacturing, 2000–2004. A theoretical concept called “localized creative destruction” is tested as a mechanism to explain the dynamics impacting the spatial distribution of manufacturing establishment birth and death rates. While no support of this process was found, results identify a convergence process occurring where counties with high initial birth/death rates have smaller changes in firm birth and death rates. The interpretation is that counties become more equally competitive in terms of firm formation dynamics in lieu of successful counties increasing their lead in the short run. This is potentially relevant to policymakers and economic development practitioners who are concerned with business retention and the impact of new manufacturing establishments on their existing base.location determinants, manufacturing, adjustment models, Community/Rural/Urban Development, L60, R11, R12,

Firm Birth and Death in U.S. Manufacturing: A Regional Adjustment Model

Attracting manufacturing investment is a frequently used rural development policy. Previous research in the location literature has informed policymakers which factors are most important for attracting new firm investment. Far less is known about the interaction of birth and death of establishments. A conceptual model of county-level investment in the U.S. manufacturing sector is developed from location theory and subsequent literature. Specifically, we test the relative importance of location factors influencing firm investment, and if these factors influence firm birth and death differently. Local factors include agglomeration due to localization, urbanization, and internal economies, market structure, labor quality, availability, and cost, market conditions, , infrastructure, and fiscal policy. This study covers the time period 2000 to 2004 for U.S. counties in the lower 48 states. Counts of establishments are from the U.S. Census Bureau’s Dynamic Firm Data Series, which links establishments across space and time. Negative binomial models containing spatially lagged endogenous variables are estimated in a regional adjustment framework to show how ceteris paribus changes in location factors affect the conditional number of establishment births and deaths in a county.location determinants, manufacturing, count models, Community/Rural/Urban Development, Research Methods/ Statistical Methods, L60, R11, R12,

SPATIOTEMPORAL MODELING OF AGRICULTURAL YIELD MONITOR DATA1

This paper shows that spatial panel data models can be successfully applied to an econometric analysis of farm-scale precision agriculture data. The application focuses on the estimation of the effect of controlled drainage water management equipment on corn yields. Using field-level precision agriculture data and spatial panel techniques, the yield response equation is estimated using the spatial autoregressive error random effects model with temporal heterogeneity, incorporating spatial dependence in the error term, while controlling for the topography, weather and the controlled drainage treatment. Controlling for random effects allows for the disentanglement of the effects of spatial dependence from spatial heterogeneity and omitted variables, and thus, to properly investigate the yield response. The results show that controlled drainage has a statistically significant effect on corn yields. The effect is generally positive but varies widely from year to year and field-to-field. For the two years of data controlled drainage was linked to a 2.2% increase in field average yield, but that varied from a -2.6% to a +6.5%. Evaluated at mean elevation and slope in the east part of the field, controlled drainage is associated with 10 bu/a increase and a 0.6 bu/a decrease in yields in 2005 and 2006, respectively. In the West part of the field, controlled drainage is associated with a 11 bu/a increase in 2006 and 2.81 bu/a decrease in 2005.Manufactured Housing; corn, drainage, precision agriculture, spatial panel model

Resolving Ambiguities in Gravity Wave Propagation Directions Inherent in Satellite Observations: A Simulation Study

We simulate space-based, sub-limb viewing observations of airglow brightness fluctuations caused by atmospheric gravity wave interactions with the O2 atmospheric airglow, and we demonstrate that, due to the geometry associated with such observations, the brightness fluctuations observed for the optically thick 0–0 band emission will always appear stronger for waves traveling towards the observer (satellite). The effect should be most noticeable for waves having relatively small vertical wavelengths (∼10 km) and horizontal wavelengths of 50 km or greater. For waves of short (∼100 km) horizontal wavelength, the brightness fluctuation anisotropy with respect to viewing direction may also be evident in the optically thin 0–1 band emission. Therefore, the 180° ambiguity in wave propagation direction associated with space-based observations may be eliminated for waves dissipating in the upper mesosphere and lower thermosphere