Firm Structure, Multinationals, and Manufacturing Plant Deaths

J. Jensen () and Andrew Bernard

Working Papers from U.S. Census Bureau, Center for Economic Studies

Abstract: Plant shutdowns shape industry and aggregate productivity paths and play a major role in the dynamics of employment and industrial restructuring. Plant closures in the U.S. manufacturing sector account for more than half of gross job destruction. While multi-plant firms and multinationals dominate U.S. manufacturing, theoretical and empirical work has largely ignored the role of firms in the plant shutdown decision. This paper examines the effects of firm structure on manufacturing plant closures. Using U.S. data, we find that plants belonging to multi-plant firms are less likely to exit. Similarly, plants owned by U.S. multinationals are less likely to close. However, the superior survival chances are due to the characteristics of the plants themselves rather than the nature of the firms. Controlling for plant and industry attributes that reduce the probability of death, we find that plants owned by multi-unit firms and U.S. multinationals are much more likely to close. A recent change in ownership also increases the chances that a plant will be closed.

Keywords: Exit; shutdown; closure; multi-plant firms; multinational firms; takeovers; entry costs; agglomeration; specialization (search for similar items in EconPapers)
JEL-codes: D21 D24 F23 L20 L6 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2005-10
New Economics Papers: this item is included in nep-bec and nep-com
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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https://www2.census.gov/ces/wp/2005/CES-WP-05-18.pdf First version, 2005 (application/pdf)

Related works:
Journal Article: Firm Structure, Multinationals, and Manufacturing Plant Deaths (2007)
Working Paper: Firm Structure, Multinationals, and Manufacturing Plant Deaths (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:cen:wpaper:05-18

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