An analysis of the restructured Indiana manufacturing sector and the effects of highways on economic growth
Abstract
The Indiana manufacturing sector held the largest share of jobs and output in the Hoosier State during 2010 and has been one of the state's prominent industries dating back to Bureau of Economic Analysis records in the late 1960s. Manufacturing output increased from 72,732 million dollars (inflation adjusted) to 74,917 million dollars between 2000 and 2010 despite 211,386 (or 31.3%) less manufacturing jobs. The increases in output attributed to capital investment and reduction in labor suggests a structural change within the sector. This thesis analyzed the location decisions of manufacturing investment in the restructured Indiana manufacturing sector. Prior manufacturing location choices have been based on markets, labor, agglomeration, infrastructure, and fiscal factors. This analysis suggests that firms' site selection is based on market access. This does not imply that labor, agglomeration, infrastructure, and fiscal factors are unimportant in the location process. It rather indicates that their roles may have changed in the location process or perhaps that all prospective sites that firms consider may have these attributes. The results could also suggest that the importance of the insignificant attributes is not uniform between firms, indicating that some factors are more relevant than others in location decision process. This thesis also examined the relationship between job growth and population growth in the restructured economy. This includes understanding if individuals relocate in search of employment opportunities. The relationship between people and jobs was analyzed using a simultaneous equation modeling approach and labor, market, agglomeration, infrastructure, and fiscal factors. Communities that experience job growth might see lagged population growth as people migrate to these cities in search of employment opportunities. Communities experiencing job growth might essentially see increasing unemployment as people migrate into these communities in search of employment opportunities. Job growth is more prevalent in urban areas and may be an indicator that the economic health of rural communities is in question if indeed people follow jobs.
Degree
M.S.
Advisors
McNamara, Purdue University.
Subject Area
Agricultural economics
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