Towards a Theory of De-Locating Industrial Activities: Some Evidence from the United States
Abstract
With an ever growing number of multinational and domestic firms closing down their operations or selectively cutting back services and output, the need for a decision framework which systematically evaluates how and where these reductions should occur steadily increases. The development of such a decision framework, referred to as the delocation problem is the focus of this paper. Specifically, the study traces the development of the process of de-locating activities in the United States; a process that is explainable by the multiunit, multiproduct firm and economic retrenchment. Also, the paper investigates the impact of shifts in regional economic processes, most notably the business cycle, on the magnitude and diffusion of business failure throughout the United States. The problem of measuring the diffusion of business failure employs an information statistic model.References
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