Working Paper

Clustering of auto supplier plants in the U.S.: GMM spatial logit for large samples

Abstract: A linearized version of Pinkse and Slade?s (1998) spatial probit estimator is used to account for the tendency of auto supplier plants to cluster together. By reducing estimation to two steps ? standard probit or logit followed by two-stage least squares ? linearization produces a model that can be estimated using large datasets. Our results imply significant clustering among older plants. Supplier plants are more likely to be in counties that are near assembly plants, that include interstate highways, and that are near other counties with supplier plants. New plants show no additional tendency toward clustering beyond that shown by older plants.

Keywords: Automobile supplies industry;

Bibliographic Information

Provider: Federal Reserve Bank of Chicago

Part of Series: Working Paper Series

Publication Date: 2005

Number: WP-05-18