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Big plant closures and local employment

Jofre-Monseny, Jordi, Sánchez-Vidal, Maria and Viladecans-Marsal, Elisabet (2018) Big plant closures and local employment. Journal of Economic Geography, 18 (1). pp. 163-186. ISSN 1468-2702

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Identification Number: 10.1093/jeg/lbx026


This paper estimates the impact of large plant closures on the local employment in the affected industry. Specifically, we examine the closure of 45 large manufacturing plants in Spain which relocated abroad between 2001 and 2006. We run differences-in-differences specifications in which locations that experience a closure are matched to locations with similar pre-treatment employment levels and trends. The results show that when a plant closes, for each job directly lost in the plant closure, only between 0.6 and 0.7 jobs are actually lost in the local affected industry. These effects are driven by employment expansions in local incumbent firms and, to a lesser extent, by the creation of new firms in the local industry.

Item Type: Article
Official URL:
Additional Information: © 2017 The Authors
Divisions: Centre for Economic Performance
Subjects: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HD Industries. Land use. Labor > HD2329 Industrialization
JEL classification: J - Labor and Demographic Economics > J2 - Time Allocation, Work Behavior, and Employment Determination and Creation; Human Capital; Retirement > J23 - Employment Determination; Job Creation; Demand for Labor; Self-Employment
R - Urban, Rural, and Regional Economics > R1 - General Regional Economics > R12 - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade
R - Urban, Rural, and Regional Economics > R2 - Household Analysis > R23 - Regional Migration; Regional Labor Markets; Population
R - Urban, Rural, and Regional Economics > R3 - Production Analysis and Firm Location > R34 - Input Demand Analysis
Date Deposited: 23 Apr 2018 10:24
Last Modified: 15 May 2024 23:15
Projects: ECO2013-41310, ECO2016-75941-R, 2014SGR420, ES/M010341/1
Funders: Ministerio de Economía y Competitividad, Generalitat de Catalunya, Economic & Social Research Council

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