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Manufacturing and Rural Economies in the United States: The Role of Nondurable Producers, Labor Costs and State Taxes
Author(s) -
Jelavich Mark
Publication year - 2001
Publication title -
american journal of economics and sociology
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.199
H-Index - 38
eISSN - 1536-7150
pISSN - 0002-9246
DOI - 10.1111/1536-7150.00060
Subject(s) - durable good , metropolitan area , wage , state (computer science) , estimation , business , economics , labour economics , microeconomics , geography , management , archaeology , algorithm , computer science
This paper investigates the preferences of manufacturers in deciding whether to locate in metropolitan or nonmetropolitan (rural) areas. Using 1997 state‐level data and OLS regression estimation, it was determined that nondurable goods manufacturers prefer rural areas, while durable goods manufacturers are indifferent as to area. However, both sets of manufacturers prefer to locate in larger states. Wage rates are not significant in the regressions, while durable manufacturers appear sensitive to state taxes. Some policy conclusions for local economic developers are derived from these findings.