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Analyzes the geography of the auto parts sector in North America. Drawing on a large plant-level data set, it shows an industry that is very spatially concentrated. Formal models of plant location highlight the role of transportation infrastructure as well as the importance of being within a day¿s drive of the assembly plant customer in the location choices of auto supplier plants. Tables.
Plant locations in the U.S. auto industry have been moving southward for some time now. This paper utilizes a comprehensive dataset of the U.S. auto industry and focuses on plant location decisions of auto supplier plants that were opened less than 15 years ago in the U.S. We find that agglomeration continues to matter: suppliers want to be close to each other as well as to their assembly plant customers. We also find evidence of differences in location factors for domestic and foreign suppliers. Foreign suppliers exhibit a stronger preference to be near highways, other foreign suppliers and foreign assembly plants. That helps explain the different location patterns observed for these two groups within the auto region.
A large literature has documented substantial heterogeneity in the performance of similar firms within industries, but what are the sources of that heterogeneity? In this paper we investigate one potential source of differential performance, the role of location-specific factors, including the quality and attitudes of the local workforce, the type of supplier networks, the education system, the institutional infrastructure, and local “culture.” We focus on the automobile industry and in particular the role that location-specific factors play in determining the quality of automobile production. We exploit the natural experiment provided by the establishment of assembly plants in the U.S. by Japanese auto manufacturers. A number of the most popular Japanese car models are assembled both in Japanese plants and U.S. plants. We use a unique data set of over 400,000 used-car transactions at wholesale auctions to test whether the long-run quality of otherwise identical cars depends on the country of assembly. Japanese-assembled cars sell for a modest $50 more on average and other measures of quality also show small or no differences. The finding that American plants can produce high quality (Japanese) cars suggests that there is not an inherent limitation to the U.S. manufacturing environment and that the sources of heterogeneity in quality automobile production are likely dominated by firm-specific rather than location-specific factors.
This new book investigates how the relationships of international business networks (one buyer-multiple suppliers) develop over time, looking at the geographical angle as well as an actor composition point of view. Bart Kamp presents a framework that reveals what business-to-business (b2b) factors explain buyer-supplier co-location patterns, making it possible to predict the geographical behaviour of suppliers, and also assesses whether longevity is truly the deep-rooted feature of international b2b network relationships that it is often claimed to be.