Industrial organization and regional productivity growth in American manufacturing sectors

This research utilizes an econometric model to determine the effects of recent changes in industrial organization on regional productivity growth in sixteen disaggregated manufacturing sectors. The model provides the link between two theoretical streams in economic geography: explanations of variation of regional productivity growth in manufacturing, and theories of industrial reorganization. The proposition that flexibly specialized organizational structures are more productive than their fordist predecessors is tested using the model. Regression coefficients in the model are estimated using two procedures, ordinary least squares (OLS) and seemingly unrelated regression (SUR). SUR accounts for intersectoral relationships in the model while OLS does not. The results of the regressions for most sectors are not consistent with the theory that the organization of flexible specialization leads to greater productivity growth than fordist structures. Fordist principles have an enduring impact on the industrial landscape. The degree of vertical integration is measured using a ratio of the cost of materials to the value of shipments. In aggregate manufacturing, vertical integration increased from 1967 to 1987. This continues a trend towards increased vertical integration in American manufacturing since the middle of the nineteenth century. It also refutes notions in economic geography that vertical disintegration in manufacturing sectores became more widespread over this period.; Intersectoral differences exist in industrial organization and productivity growth. Productivity growth is fastest in capital intensive sectors, such as transportation equipment, food products, and textiles. These sectors are primarily vertically integrated. The research finds that fordism is positively associated with productivity growth in process-oriented sectors, such as paper products. In product-oriented sectors such as electronic equipment, flexible specialization leads to productivity growth. Sectors which rely on ties to natural resources and skilled local labor markets are vertically disintegrating.; Productivity growth was the fastest in the Southeast because of a unique industrial mix of high-technology and standardized product sectors in the region. The traditional Manufacturing Core had the second fastest growth rate, followed in order by the Interior and the West. The increased vertical integration of American manufacturing sectors and the continued success of the Manufacturing Core show that the modern industrial landscape is not characterized by a fundamental break from a previous industrial age.