Local Economic Conditions and Plant Opening or Closure
| Dep. Var.: Log # Plant Openings | Dep. Var.: Log # Plant Closures | |||||||
|---|---|---|---|---|---|---|---|---|
| SIC3 Level (1) | SIC3 Diff. (2) | SIC4 Level (3) | SIC4 Diff. (4) | SIC3 Level (5) | SIC3 Diff. (6) | SIC4 Level (7) | SIC4 Diff. (8) | |
| Unemp-pop. ratio, [t – 1] | -0.422 | -0.229 | -0.178 | -0.143 | 0.215 | 0.682 | 0.287 | 0.558 |
| -8.15 | -5.78 | -5.15 | -4.28 | 3.75 | 14.71 | 6.12 | 14.12 | |
| log(median HH income), [t – 1] | 0.004 | 0.000 | -0.002 | 0.000 | 0.011 | -0.002 | 0.005 | -0.001 |
| 0.77 | 0.05 | -0.96 | -0.03 | 1.49 | -2.04 | 1.20 | -1.41 | |
| Year fixed effects | Y | Y | Y | Y | Y | Y | Y | Y |
| Industry-county fixed effects | Y | Y | Y | Y | Y | Y | Y | Y |
| Observations | 3,340,000 | 3,340,000 | 4,830,000 | 4,830,000 | 3,340,000 | 3,340,000 | 4,830,000 | 4,830,000 |
| R2 | 0.3868 | 0.3867 | 0.3306 | 0.3306 | 0.4601 | 0.4601 | 0.3935 | 0.3936 |
Notes: This table examines the relation between local economic conditions and plant opening and closure using a sample of industry–county–year observations constructed using the LBD. In Columns 1–4 (Columns 5–8), the dependent variable is the log (one plus) number of plant openings or closures in a given industry–county–year cell. Local economic conditions are proxied for by the one-year-lagged unemployment-to-population ratio and log median household income, either in level (odd-numbered columns) or first-difference (even-numbered columns). Columns 1–2 and 5–6 (Columns 3–4 and 7–8) present estimates using three- and four-digit SIC industries to compute the log number of plant openings or closures. The t-statistics based on standard errors adjusted for sample clustering at the county level are reported below the coefficient estimates. The numbers of observations are rounded to the nearest thousand to follow the U.S. Census Bureau’s disclosure rules.