Comparing location decisions of domestic and foreign auto supplier plants
Plant locations in the U.S. auto industry have been moving southward for some time now.
This paper utilizes a comprehensive dataset of the U.S. auto industry and focuses on plant
location decisions of auto supplier plants that were opened less than 15 years ago in the
U.S. We find that agglomeration continues to matter: suppliers want to be close to each
other as well as to their assembly plant customers. We also find evidence of differences
in location factors for domestic and foreign suppliers. Foreign suppliers exhibit a stronger
preference to be near highways, other foreign suppliers and foreign assembly plants. That
helps explain the different location patterns observed for these two groups within the auto
region.
