Evolving Agglomeration in the U.S. Auto Supplier Industry
Using nonparametric descriptive tools developed by Duranton and Overman
(2005), we show that both new and old auto supplier plants are highly concentrated in the
eastern United States. Conditional logit models imply that much of this concentration
can be explained parametrically by distance from Detroit, proximity to assembly plants,
and access to the interstate highway system. New plants are more likely to be located in
zip codes that are close to existing supplier plants. However, the degree of clustering
observed is still greater than implied by the logit estimates.
