Cities and the Organization of Manufacturing

Abstract

This paper provides a recent account of the distribution of manufacturing activity across cities in the U.S. After years of nationwide decline in manufacturing employment, and migration of manufacturing plants to suburbs and rural areas, the following pattern emerges for overall manufacturing as of 1990: i) Number of manufacturing establishments increases more than proportionally with city population, ii) Manufacturing employment in a city increases in proportion to city population, and iii) Employee size distribution of establishments is stochastically decreasing as city population increases. While these results are in part driven by industry composition in cities, in many individual manufacturing industries larger cities tend to accommodate more employment through an expansion in number of establishments, but not always through an expansion of establishment size. Implications of these findings on the new economic geography and other theories relating city size and scale of production are discussed.cities economic geography manufacturing establishment size