Essays on the Impact of the Geographic Concentration of Industries on Competition and Knowledge Spillovers

The two essays that constitute this dissertation examine the impact of geographic concentration on organization mortality and relocation. The geographic distribution of an industry determines geographical variation in the performance of organizations within it. In the first essay ("Local Competition, Mortality and Relocation: Geographic Concentration in the US Firearms Industry, 1790-1914"), I argue that a positive relationship between mortality and geographic concentration need not be caused by lower performance in concentrated areas relative to other areas. To test this argument, I use organizational relocation to construct and conduct an 'escape valve' test of local competition in the context of the US firearms industry. The results of the test indicate that organizational relocation and higher mortality rates are not driven by lower performance in dense areas. I put forward an alternative explanation for the results based on the idea that industry exit and and relocation are determined by entrepreneurial and organizational performance thresholds that are affected by geographic variation in opportunity costs. An increasing body of evidence suggests that the costs and benefits of locating in proximity to geographic concentrations of an industry depend on the local industrial organization. In the second essay ("Geographic Concentration and the Local History of Industrial Organization: Postbellum Firearms Firms in the Southern United States"), I argue that they also depend on the previous forms of local industrial organization experienced by organizations proximate to the focal firm. I use the US Civil War as an exogenous institutional shock that briefly changed the industrial organization of the firearms industry in the US South and created two groups of firms in the post-War period---those with experience of the shock and those without. Within this post-War period, I examine differences between the effects of concentrations of Civil War firms and the effects of concentrations of post-Civil War firms on organizational mortality and provide evidence in support of my argument.