Industrial Restructuring: Implications for the Decentralization of Manufacturing to Nonmetropolitan Areas

Abstract

Traditional methods of industrial organization and production are giving way to smaller, more flexible and specialized operations. This industrial restructuring increases the importance of localization economies relative to internal economies, and thus, the attractiveness of rural locations is reduced. Analysis of spatial employment data for 106 metalworking industries for 1981 to 1986 supports the restructuring/agglomeration hypothesis. Industries experiencing marked shifts toward specialization and reduced size (vertical disintegration) were less likely to relocate employment from metro to nonmetro areas. However, the relationship between industrial restructuring propensities and agglomeration was weak after controlling for industry growth rates and technological sophistication.