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Midwest Social Sciences Journal

Abstract

The trend in manufacturing employment is on a downward trajectory nationally, further exacerbated by short-term fluctuations. Indiana mirrors this trend, and as such, we explore the structure of the manufacturing sector using a spatial and snapshot approach during and after the Great Recession of 2007-2009. Using two measures: (1) average firm size and (2) gap in percent of local manufacturing employment, we explain the dynamics at specific periods, viz., 2007 at the beginning of the Recession, 2009 at the trough of the Great Recession, 2014 at a point in recovery from the Great Recession, and 2016 at the endpoint for our analysis. Our results show counties are spatially dependent for the average firm size and percent employed in the manufacturing sector but spatially independent for the change (gap) in the same variables both during and after the Great Recession. Between 2007 and 2009, the decline in average firm size was greatest for Rural (R), followed by Non-Metro but adjacent to Metro (NMA), and then Metro (M) counties. However, by 2016, the average firm size in Metro counties was higher than the 2007 level, whereas non-Metro but adjacent to Metro and Rural counties, failed to rebound to the 2007 level. The relative ranking by degree of urbanization remains consistent with respect to local employment in manufacturing—although all groups experienced a decline during the Great Recession and even in recovery. These results suggest location is an important determinant and reinforce the importance of economic policies that can impact a group of counties or economic growth regions rather than individual counties.

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