Do Manufacturers Search for a Location? The Case of Hardwood Processors

Abstract

There is growing federal, state, and local interest in forest-based economic development in the United States. Programs to encourage this development often focus on industry recruitment, implicitly assuming that firms search for new locations in other states. This study examines firms that conduct a location search and those that do not, and identifies factors related to their decisions. Concepts from neoclassical and behavioral location theory form the context for this analysis. The large majority of establishments did not conduct a multiple-site location search. To a great extent, establishments located based on personal ties. The majority of variables found to influence the likelihood of a search are not controllable by state or local government. The implication is that local development policy should focus on existing firms, rather than on recruitment.

Public Infrastructure in Economic Development and Growth: Evidence From Rural Manufacturers

“…Very little growth in the manufacturing sector appears to come from firm relocation. This result is consistent with the recent findings of Bodenman, Smith, and Jones (1996). In their study of hardwood processors, they found that the majority of firms in their sample did not go through any formal search process and commonly located in their current site due to personal ties to the area.…”

The New Economy and the Forest: Rural Development in the Post‐Industrial Spaces of the Rural Alleghenies*

“…Surveyed county residents and planners respectively considered the quality of life, despite the lack of jobs, to be its greatest asset and most marketable commodity (Forest County Conservation District and Planning Department, 1998; Singletary, 1993). Bodenman, Smith, and Jones (1996) found an area's lifestyle to be more important than traditional economic siting factors in business location decisions made by Pennsylvania's small‐scale, value‐added hardwood manufacturers. Other than limited and restricted public sector job openings, entrepreneurship offers one of the few ways one could support the choice to live in Forest County.…”