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The Effect of State Policies on the Location of Manufacturing: Evidence from State Borders

Thomas J. Holmes
Journal of Political Economy
Vol. 106, No. 4 (August 1998), pp. 667-705
DOI: 10.1086/250026
Stable URL: http://www.jstor.org/stable/10.1086/250026
Page Count: 39
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The Effect of State Policies on the Location of Manufacturing: Evidence from State Borders
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Abstract

This paper provides new evidence that state policies play a role in the location of industry. The paper classifies a state as probusiness if it has a right‐to‐work law and antibusiness if it does not. The paper finds that, on average, there is a large, abrupt increase in manufacturing activity when one crosses a state border from an antibusiness state into a probusiness state.

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