EXPANSION OF MARKETS AND THE GEOGRAPHIC-DISTRIBUTION OF ECONOMIC-ACTIVITIES - THE TRENDS IN US REGIONAL MANUFACTURING STRUCTURE, 1860-1987

This paper presents evidence on the long-run trends in U.S. regional specialization and localization and examines which model of regional specialization is most consistent with the data. Regional specialization in the United States rose substantially between 1860 and the turn of the twentieth century, flattened out during the interwar years, and then fell substantially and continuously since the 1930s. The analysis of the long-run trends in U.S. regional specialization and localization supports explanations based on production scale economies and the Heckscher-Ohlin model but is inconsistent with explanations based on external economies.