nomic growth and may improve the targeting of industrial recruitment activities.
Of course, there are reasons other than actual economic effects as to why plants may be
recruited. For example, political leaders may want to recruit firms because their siting in
the jurisdiction leads to a perception of success.
For example, see Center for Business and Economic Services and Fluor Daniel Siting and
Consulting Services (undated) and Center for Business and Economic Research ( 1992).
See Bartik ( 1991)
for a discussion of alternative specifications of the stock adjustment
One approach to dealing with the selection bias issue is through the application of specialized statistical tools; see Maddala ( 1983)
. An alternative is to develop a pseudo-control
group, using the quasi-experimental design approach. This latter approach uses multidimensional matching to identify similar communities, one receiving treatment (that is,
plant location) and the other not.
Largely neutral effects surface under respecifications of the model where the dummy and
interaction terms are included individually. In these latter equations, the coefficients of the
indicator variables are statistically insignificant, while the interaction terms in the county
and area income equations have positive effects.
This includes eight equations, four of which include both the slope and intercept dummies
and four of which include only the dummy variable and 24 companies. Note that an array
of alternative specifications of the model was also estimated, including employment and
income growth rate equations. In general, plant openings had either no impact or a negative
impact on regional growth.
Bartik, Timothy J. ( 1991), "The effects of property taxes and other local public
policies on the intrametropolitan pattern of business location", in
Henry W. Herzog
Alan M. Schlottmann (eds), Industry Location and Public Policy, Knoxville,
TN: The University of Tennessee Press.
Center for Business and Economic Research ( 1992), The Economic Significance of
Toyota Motor Manufacturing, USA, Inc. in Kentucky, Lexington: College of Business and Economics, University of Kentucky.
Center for Business and Economic Services and Fluor Daniel Siting and Consulting
Services (undated), Economic Impact Analysis of the Mercedes Benz A. G. MPV
Production Facility for the State of Alabama, Troy, Alabama.
Fox, William F. ( 1990), "Japanese investment in Tennessee: the economic effects of
Nissan's location in Smyrna", in
Ernest J. Vanarella and
William C. Green (eds), The Politics of Industrial Recruitment, New York: Greenwood Press.
Fox, William F. and
Matthew N. Murray ( 1990), "Local public policies and interregional
business development", Southern Economic Journal, 57, 413-27.
Fulton, George A. and
Donald R. Grimes ( 1993), The Economic Impact of the
Domestic Automotive Industry on the US and its Major Regions, Ann Arbor: Institute of Labour and Industrial Relations, University of Michigan.