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Investment, Capital Stocks and the Age of Capital in U.S. Regions
Author(s) -
RIGBY DAVID L.
Publication year - 1995
Publication title -
growth and change
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.657
H-Index - 55
eISSN - 1468-2257
pISSN - 0017-4815
DOI - 10.1111/j.1468-2257.1995.tb00183.x
Subject(s) - depreciation (economics) , fixed capital , physical capital , capital (architecture) , investment (military) , economics , capital formation , census , financial capital , capital deepening , distribution (mathematics) , stock (firearms) , capital good , business , economy , geography , market economy , human capital , population , political science , mathematical analysis , goods and services , demography , mathematics , archaeology , sociology , politics , law
This paper outlines a conventional method of constructing regional capital stocks using investment and depreciation data. The method was used to estimate annual capital stocks for twenty (two‐digit SIC) manufacturing industries in the nine census regions of the US. between 1955 and 1989. The novelty of the paper is the disaggregated capital stock data generated. Those data reveal that the industrial distribution of capital is becoming increasingly similar among regions of the U.S. They also show the familiar snowbelt‐sunbelt shift of manufacturing capacity. Statistical tests establish that the redistribution of regional net capital stocks between 1955 and 1989 is significant in sixteen of twenty industries and that in ten of these sectors the most pronounced shifts in capacity occurred before the early 1970s. As investment moved away from the old manufacturing heartland, the age of capital in the mid Atlantic and east north central states increased and the age structure of capital stocks became relatively youthful in the west. Age pyramids reveal that regional variations in the age distribution of capital and the average age of capital were greater in 1989 than in 1955. Models of embodied technological change claim that the age of capital is a useful surrogate of best‐practice technology.