We estimate the factors determining specialization of crop choice at the level of individual fields, distinguishing between the role of natural advantage (soil characteristics) and economies of density (scale economies achieved when farmers plant neighboring fields with the same crop). Using rich geographic data from North Dakota, including new data on crop choice collected by satellite, we est...

Sheila A. Martin is a senior economist in the Research Triangle Institute’s Center for Economics Research. She earned a Ph.D. in Economics from Iowa State University in 1992 and holds an M.A. in International Studies from the University of Kentucky. At the Center for Agricultural and Rural Development, she researched industrial and rural development policy issues, including industryand plant-le...

This research analyzes manufacturing growth and decline across metropolitan and nonmetropolitan regions during the 1972–2002 period. We decompose real value added growth across local labor market areas in the lower 48 U.S. states into contributions from labor, capital, and total factor productivity. We then estimate a model describing the long-run growth of labor, capital, and productivity and ...

New theoretical work on spatial concentration of industry – particularly the ‘new economic geography’ – has significantly helped us understanding why some regions develop more than others, why cities arise and where they are located. However, this work rarely incorporates Adam Smith’s observation that spatial differences in economic activity also reflect variations in physical geography, which ...

We exploit historical data on planned highways, railroads, and exploration routes as sources of exogenous variation in order to estimate the effect of interstate highways on regional innovation: a 10% increase in a region’s stock of highways causes a 1.7% increase in regional patenting over a five-year period. In terms of the mechanism, we report evidence that roads facilitate local knowledge f...

We find that a firm’s investment is highly sensitive to the investments of other firms headquartered nearby, even those in very different industries. It also responds to fluctuations in the cash flows and stock prices (q) of local firms outside its sector. Similar local effects are observed for anticipated investment, as measured by debt and equity offerings. These patterns do not appear to ref...

A Melitz-style model of monopolistic competition with heterogeneous firms is integrated into a simple NEG model to show that the standard assumption of identical firms is neither necessary nor innocuous. We show that re-locating to the big region is most attractive for the most productivity firms; this implies interesting results for empirical work and policy analysis. A ‘selection effect’ mean...