What Affects Firm Location and Firm Employment at State Borders?

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Date
2019-04-01
Authors
Chen, Yulong
Ma, Liyuan
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Center for Agricultural and Rural Development

The Center for Agricultural and Rural Development (CARD) conducts innovative public policy and economic research on agricultural, environmental, and food issues. CARD uniquely combines academic excellence with engagement and anticipatory thinking to inform and benefit society.

CARD researchers develop and apply economic theory, quantitative methods, and interdisciplinary approaches to create relevant knowledge. Communication efforts target state and federal policymakers; the research community; agricultural, food, and environmental groups; individual decision-makers; and international audiences.

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WHAT MAKES some places grow and some places stagnate or decline? There are many politicians, economic development specialists, and regional planning experts who claim they hold the keys to economic growth, and yet there is great persistence in the strength of local economies over very long time periods. The five states with the lowest labor productivity in 1974 were Mississippi, South Carolina, Vermont, Arkansas, and Maine. By 2015, all of these states were still ranked among the bottom six states. As wages follow labor productivity, these states also ranked among the bottom ten in average earnings per job over the 41- year period. Surely if there were some magic elixir that spurred economic growth, at least one of these states would have broken out from the bottom of the pack. Perhaps the only ones benefiting from the development advice are the advisers.

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