The Importance of Small Manufacturing Firms:

A Policy Review

Prepared for:

Made Right Here

A Policy Conference

June 20-21, Charleston, West Virginia

Sponsored by:

The Center for Economic Options, Inc.

by

Michael J. Hicks

Center for Business and Economic Research

Marshall University

Introduction

The manufacturing sector enjoys a prominent place in economic policy discussions; so too does small business. This concern for both the manufacturing industry and small businesses manifests itself in a growing number of public policy and research efforts that focus on small manufacturing firms. The “Made Right Here” Conference is an important example. The attention paid to small manufacturing firms should be welcomed, especially in Appalachia. This focus on small manufacturing firms is also warranted since, as I will later detail, they comprise an important part of our region’s economy.

One hopeful outcome of this attention is that reevaluation of existing public policy and the crafting of new initiatives that improve the performance of small manufacturing firms may emerge. Happily, our understanding of the role of small enterprises is largely rooted in solid theory and empirical evaluation. The result is that most policy initiatives surrounding small business are guided by thoughtful analysis. To be sure, there are disagreements, but these are largely about questions where serious researchers have not yet provided answers. This is a happy outcome of informed public policy making.

However, the main problem that befalls the debate about the manufacturing industry, at virtually all levels of discussion, is that refutable myths, which are deceivingly easy to formulate and disseminate, intrude on the formation of effective policy. Indeed, there is likely no greater held error in public policy than that which surrounds the reason the manufacturing industry is important to regional economies. The chief problem with the myths surrounding the manufacturing sector is not just that they are wrong, but that they severely underestimate the importance of the sector. This results in trivial and often ineffectual policy interventions.

To be clear, the manufacturing industry is important to regional economies. However, as public officials craft policy to aid the manufacturing sector, an error in identifying the features of the sector that are important may lead to ineffectual or even counterproductive policy.

In this paper I will endeavor to dispel the most egregious of these myths and attempt to replace them with an explanation of why manufacturing is an important segment of the economy. This is followed by an explanation of what we do, and do not know about small manufacturing firms (and here we emphasize West Virginia and Appalachia). Finally, we outline some plausible public policy measures that may improve the performance of small manufacturing firms in Appalachia.

Some Myths of Manufacturing

Firms that produce goods are ubiquitous in modern economies. West Virginia and Appalachia as a whole enjoy a large array of manufacturing firms that produce all manner of goods. Communities and their leaders especially rejoice in the presence, entrance and expansion of these firms. These firms come in all sizes, from sole proprietorships to multinational corporations. This sector of our economy is to be appreciated and nurtured, but, the importance of this industry is far greater than that which is typically provided as an explanation for manufacturing’s critical role in a regional economy. To better explain this, we provide a familiar stylized explanation of a regional economy.

The Economic Base Story

A common description of a regional economy is the economic base story. In this description, a regional economy is composed of firms that produce goods and services that are traded both within and outside the area. Firms that export goods or services to another area (be it Hong Kong or Illinois) are the ‘economic base’ of the region. These firms bring money into the region which is then recirculated among the remaining part of the economy. This recirculation of money, often referred to as the multiplier effect, leads to more jobs and an improved regional economy. Of course, the economic base of a region need not be manufacturing. It could be tourism, health care or financial services, just as long as it attracts outside dollars. But, manufacturing is almost always wholly part of the ‘economic base’ because few manufacturing firms produce goods that are consumed, to any important degree, within the local area. Simply, most goods are exported to other regions, while services are not.[1] This description of an economy is typically the mantra of economic development staffs at all levels. It is a simple story, easy to explain, and wholly digestible without any formal economic training. Unfortunately, as anything other than a simple description of very complex interactions, it has severe limitations. Its primary weakness is as an explanation for economic growth. Importantly, all economic models suffer some limitations. Problems arise if these limitations discourage good public policy efforts. The economic base story does little to clarify policy options that matter with respect to the growth of manufacturing firms.

One easy conclusion to be derived from the economic base story is that for a region to prosper it must engage in trade. This is likely true. A second conclusion is that for a region to prosper it must attract more of the trade flow than other regions (or have a net positive balance of trade).[2] This is wrong. It may also lead to bad policy. A third conclusion is that for a region to prosper it must compete effectively with other regions. This too is wrong, and may lead to especially egregious policies. Let me explain.

At its most direct level, all trade is a zero-sum game. Any dollar I spend in West Virginia cannot be spent in Illinois or Hong Kong.[3] The economic base story speaks to the regional allocation of the goods and services we can produce at any given time, it cannot explain the phenomenon of economic growth (beyond the increase in input quantities such as labor). While some regions can prosper through these trade flows, on average there will be no change in prosperity. Of course this cannot be all of the story since the world’s economy grown by twenty fold over the last century, which is far faster than the growth of inputs such as labor and capital. It is not trade directly that generates economic growth; it is something that accompanies trade. It is some by-product of exchange that makes the world’s economy grow.

Even more succinctly, if it is simply trade flows that matter, then the United States, which has suffered a trade deficit for almost three generations, should be in economic decline. Instead, we have consistently both the highest standard of living and the highest rate of economic growth in the world over the same time period.

On a final note (for if you are not convinced by these data then you should stop reading) regions that have a high proportion of their economy in the ‘economic base’ should prosper over those with less. This is not true, and for just one piece of evidence no state with a smaller proportion of its economy in manufacturing has suffered slower growth or lower incomes than West Virginia.

Trade does matter but not because of flows but because of some other impact of the trade. It is especially important to realize that the vast majority of most trade flows that involve West Virginia businesses and citizens are not foreign trade, but trade with businesses and citizens of other states.

Why Trade Does Matter

The import and export of goods is critical to a dynamic economy. We need look no further than recent history to confirm this. In 1950 both South Korea and India were squalid artifacts of the 17^th century. India had recently emerged from colonial rule with a clear set of institutions and a reasonable set of roads and associated infrastructure. It was also blessed with a significant potential export market (which is why it was colonized in the first place). South Korea emerged from a remarkably brutal colonial rule, which left it devoid of institutions and exportable goods. Both countries suffered per capita incomes that hovered below $300 in today’s currency.

Over the next forty years India cleaved close to Gandhi’s “self reliance” movement which strongly eschewed foreign trade. India struggled to improve infrastructure and education and push for economic growth. They had none. To make matters worse, South Korea suffered a second near total destruction of their infrastructure during the 1950-3 conflict, but emerged with a strong political interest in trade. The differences were dramatic.

By 1990, South Korea enjoyed per capita incomes that were higher than in 45 of West Virginia’s 55 counties, and if we do not count federal transfer payments South Korea’s per capita income was higher than West Virginia’s. India, in 1990, had a per capita income of roughly $300 per person. There had been no real economic growth. There is more to the story, but the divergence in these two economies is largely explained by the willingness to participate in foreign trade. As an interesting post script, India abandoned its ‘self reliance’ movement with a strong push towards trade throughout the 1990’s and it is India today that is a noticeable relocation site for outsourced American jobs and with a tripling of per capita income.

Finally, the world’s largest and most prosperous, most technologically advanced, most dynamic economy is the oldest free trade zone. The Interstate Commerce Clause of the 4^th Amendment of the Constitution of the United States created the first real free trade zone.

So, having established that trade matters, it is important to understand why. Trade, an activity which is carried out by consumers and firms (not as rhetoric would have it, nations) increases the productivity of workers and firms within a region. It is the increase in productivity (the value of goods produced by each worker is a common measure) that generates the real benefits of trade.

As David Ricardo pointed out in his Principles in 1815, the production of most goods and services (he supplied an agricultural example) can occur anywhere. But, it is typically less costly to produce a given good in one region or another. This may be due to climate as in Ricardo’s example, or because of natural resources (tea in India, coal in West Virginia) or through proximity to low cost transportation (as in Huntington or Baltimore) or because of scale and scope economies that result from clustering (Silicon Valley, Dalton, Georgia or Hickory, North Carolina). Relatively high productivity in the production of one good or service leads to comparative advantage. It is the flow of production to places that enjoy comparative advantage and the productivity gains associated with them that leads to economic growth worldwide and here in West Virginia.[4]

Policymakers also are concerned with the diversification of an economy. This is important, but not to growth. There is no correlation between economic growth and the diversity of an economy. Indeed, West Virginia’s economy, at the State level is not more than 5 percent less diverse than the average State. It is simply an empirical fact that most regions tend to specialize, as David Ricardo explained in 1815. However, having a diverse economy, which is less dependent on a single industry that suffers large cyclical changes (coal for example), makes regions more stable. This stability is typically welcomed (especially if it does not hamper long term growth trends).

Importantly, regions do not compete, firms do. A region that enjoys no absolute advantage in any good can still enjoy comparative advantage in one good. As long as productivity increases so too will prosperity. If individuals and firms enjoy high levels of productivity then that translates into high regional productivity. Regions that enjoy high levels of per capita income also have high worker productivity. It is this productivity that leads to higher wages, and higher regional incomes (and oftentimes higher regional productivity if good policies are pursued). In Manufacturing, West Virginia has maintained a relatively high level of productivity compared to the nation as a whole.[5] This has been less true in the labor intensive industries. See Figure 1.

There was a chart here

Though it may not be apparent in this graph, with each decline in manufacturing productivity, labor intensive industries have experienced a relative decline in productivity. However, with each increase in manufacturing productivity, there has been no associated relative increase in the labor intensive industries. This downward ‘ratchet effect’ is what permits manufacturing to serve as a predictor of productivity changes in other sectors.[6] Importantly, this figure illustrates productivity changes in West Virginia relative to the nation as a whole, not absolute declines in productivity.

A common misunderstanding of costs and productivity leads to unwarranted fears of a downward spiral of job losses that accompany outsourcing or trade. It is the productivity of a worker determines their wage. For example, a master bricklayer can lay 250 bricks in a day. If he earns $200 per day he is a high wage worker in comparison to a beginning bricklayer who earns perhaps half that wage or $100 a day. However, the master bricklayer is the low cost worker if the beginner can lay only 125 bricks a day.
It is the value of goods produced per unit of cost that matters, not the wage of the bricklayer. If it were wages that mattered Somalia would be a vibrant destination for American firms, not a pitiful agglomeration of human misery.

There was a chart here

If the reader remains unconvinced then a quick review of similar analysis by either Paul Krugman or Milton Friedman, two superb economists who share political views at the extreme opposite ends of the spectrum may prove helpful. Pick either for they are both right in this matter. The benefits of trade are too simply arithmetic to fall to political dogma – if you can do the math.

Why Manufacturing Is Important

So, having refuted the main argument in support of manufacturing – that it is an all important economic base, why is manufacturing important? To most economics, the manufacturing sector serves as an indicator of relative changes in regional productivity. The production of goods, to a far larger extent than services, is not bound to population. The production of goods, unless regionally constrained by raw materials and transportation may occur anywhere. This makes manufacturing firms much more susceptible to relative changes in productivity than firms that provide services. The loss of the manufacturing industry (though not necessarily workers) should provide evidence that a change in relative productivity has occurred. If regions suffer from some deficit in the production process that leads to a loss of comparative advantage then the result will be loss of production of these goods or services. So, manufacturing is not important because its loss will lead to lower trade flows, it is important because a decline in manufacturing may signal an overall regional decline in productivity. This is very important since manufacturing typically comprises a very small proportion of any region’s economy, and the general decline in productivity may be shared across all industries.

The argument that manufacturing serves as the ‘canary in a coalmine’ suggests that it is much more important than the simple economic base story suggests. However, this abstract concern does not deny that changes in industrial composition or trade flows do not generate economic distress. The common concern over loss of manufacturing jobs is real. It warrants special treatment.

The Worry About Jobs

Agricultural jobs, as a share of employment, peaked in pre-historic times, though as late at 1900 a third of U.S. jobs were on the farm. Manufacturing firms, as a share of non-agricultural jobs probably peaked at about the same time. The ensuing productivity gains led to fewer workers, producing more goods, which enabled a greater share of production in other sectors. This trend has, and likely will continue forever and is the cause of most manufacturing job loss. This is certainly true for the United States where manufacturing production has risen steadily through the recent business cycle, while manufacturing jobs, as a share of total employment have dropped for almost three generations.

One important paper decomposes efficiency changes from technological changes from the mid 1970’s through 1989. This paper also identified labor and capital bias in new technology. The authors found that during the heavy manufacturing job loss period, it was capital biased technology playing a relatively large role in productivity growth. This resulted in faster employment reductions.[7] Another important paper found that during the same period firms that enjoyed both productivity and employment growth contributed more to overall manufacturing productivity growth than did firms that enjoyed productivity growth but employment declines. Firms that grew employment without increasing productivity dampened the overall effect. The lesson I would like to impart is that explanation of productivity growth, downsizing and outsourcing is not a simple one.[8]

There was a chart here

Manufacturing jobs have always been viewed as good jobs – steady, high paying and with benefits. This is true, but the reason manufacturing jobs have been high paying and steady is because of the relatively high productivity of workers in these jobs. Simply, manufacturing employees are not highly paid because of their industrial sector, but because of the value they provide to the production process. [9]

Over the past century, manufacturing wages have been high due to the high productivity of these jobs. The high contribution of physical capital (plant and equipment) to the production process makes manufacturing a capital-intensive industry. Within capital-intensive industries workers can then produce a higher value of goods than is typically the case in labor-intensive industries. This is the leading source of high wages in the manufacturing industry.

In recent decades, the share of manufacturing employment in the United States has declined as productivity has continued to grow. Displaced workers and workers in younger age cohorts that have not been employed within the manufacturing sector find work within other sectors. We know this to be true because even during the most recent recession the unemployment rate is near its historical low while labor force participation is at an historical high. This trend may be seen to have two important effects for workers and income.

First, the jobs the newer workers and displaced manufacturing employees have found within other sectors often experiences lower capital to labor ratios than the manufacturing sector. Thus, the human capital contribution to overall labor productivity becomes a more critical determinant of wages. Simply, the shift away from traditional manufacturing will result in individual worker skills playing an increasingly important role in influencing wages.[10] If this trend continues then the acquisition of human capital will increasingly influence wages for new workers.

Second, as manufacturing jobs make up a decreasing share of employment, manufacturing firms will increasingly demand higher skilled workers. Increasingly complex production processes will magnify this trend. One result is that human capital requirements among manufacturing workers is likely to rise. This means that manufacturing jobs may well pay better in the future, but also demand better trained workers in the coming years.[11] Certainly the formal education requirements for manufacturing workers have increased dramatically from even a generation or two ago. An unwelcomed side effect of this trend is that it may result in a loss of one of the features of manufacturing that has made it a popular industry – its high wages for workers relative to their formal education.

To reiterate, manufacturing is an important sector of our economy. However, the worries about the loss of manufacturing and our economic base are unwarranted. Manufacturing matters for two reasons. First, it is a highly productive sector of our economy and thus generates high wages for workers. Second, changes in the relative productivity of the manufacturing sector may signal changes across other sectors within a region. Firm size is also of importance, with small firms playing an important role in a regions economy, especially in West Virginia.

The Importance of Small Firms

Most of the policy concerns of big businesses are also important to small firms. However, those policy matters that are critical to small firms may be unimportant to larger enterprises. This fact alone may signal a need for policy initiatives directed towards small business. That is why efforts such as this conference are so critical to forwarding effective policies to stimulate small business.

Small businesses dominate the economic landscape of the United States. By far, the majority of business have fewer than fifty employees (which is one definition of a small business). In West Virginia, roughly ninety percent of all businesses have fewer than fifty employees. Indeed, West Virginia can boast roughly 12 percent of the labor force employed in very small or microbusinesses which have fewer than five employees.

There was a chart here

There are many reasons small businesses matter to a regions economy. This review will focus on the economic importance of small businesses, but we would be remiss if we did not acknowledge other important considerations that are not typically evaluated by economists.

Small businesses are likely tied more closely to the communities in which they are located. This may result in stronger involvement in local activities from Little League sponsorship to Rotary participation. Since small businesses tend to be more locally focuses likely results in stronger community involvement. This is an empirical question, but one I will defer to other disciplines.

The economic importance of small firms is well documented. Even a rough analysis of the importance of small firms it outside the scope of this paper. However, I believe three contributions of small businesses warrant special discussion.

First, small businesses comprise a considerably larger part of the economy than even their strongest advocates typically suppose. In West Virginia, small firms dominate the economic landscape. As the figure above illustrates a majority of firms are small and they employ a plurality of the States’ workers. The share of small business is striking.

There was a chart here.

Second, small firms are key contributors to the technological and managerial experimentation that fosters productivity growth. Small firms play a role in changing market structure and in providing an opportunity for entrepreneurs. Recent data assembled by the Census and Bureau of Labor Statistics has provided considerable insight into job creation and entrepreneurship. In a 1999 analysis of this data, the authors found that small firms (fewer than 20 employees) showed the highest employment growth rates. This translated into small businesses enjoying the highest rates of job creation among all sizes of firms.[12] I am aware of no empirical evidence to contradict these findings.

Third, small businesses act as an important entry into labor markets. The robust expansion and employment dynamics of small business are often cited as key evidence of the forces that force changes in economic structure toward competition. One widely touted example of this is the high proportion of small firms in the United States as compared to Europe. One potential result is the relative inflexibility of the European labor markets as compared to those in the United States. One result of this are higher levels of structural unemployment. Small business are important, but this conference is about small manufacturing firms, so it is important to quantify their role in the State and region’s economy.

Small Manufacturing Firms

Overall, small manufacturing firms represent 13.4 of total employment in the State and 6.4 percent of firms. These firms produce everything from marbles to aircraft. Note, that in the case of manufacturers, small firms dominate the economic landscape. It is not just labor intensive firms that are small, but also manufacturing firms.

There was a chart here

From these estimates of the size of the small manufacturing sector in West Virginia it is important to consider what policy issues matter to their health and expansion.

Policy Considerations for Small Manufacturing Firms

While all firms are concerned with a wide range of policy issues, small businesses are especially sensitive to a number of issues that need policy consideration. We outline these below.

First, the regional condition of human capital (primarily educational attainment and job skills) is critical to the success of small firms. Small firms are especially sensitive to weaknesses in human capital since a single employee represents a relatively high proportion of the workforce, and economies of scale often preclude formal firm level training. In the short term, investments in workforce training and a high quality community and technical college system are critical to small firms. In the long run, the quality of K-12 education and higher education will largely determine the success of small businesses within a region.

Second, small businesses are particularly sensitive to financial constraints. A recently published study of the impact of small loans found that the per capita rate of small business loans (under $100,000) in West Virginia were correlated with higher rates of small businesses within counties.[13] Clearly continued regulatory enforcement of the Community Reinvestment Act is important to small businesses. Also, a program of microfinance may offer financing remedies to entrepreneurs with structural impediments to the acquisition of capital.

Third, small businesses are very sensitive to barriers to entry in both input and output markets. The chief barrier to entry in markets for inputs is in labor market participation. Policies that limit job participation make the operation of a small business more difficult. However, since many policies that limit job participation have other positive goals (e.g. Workers’ Compensation and unemployment benefits, visa requirements, etc.) balance in these areas will be a continuing policy concern.

Barriers to entry in output markets may include high transactions costs and anticompetitive conditions. Transactions costs may be administrative or regulatory and thus as with labor market regulations may have features that meet desirable public policy goals. Thus balance is important. One common approach to balancing the desirable features of regulation with the ill effects these regulations may visit upon small businesses is a size exemption. Any policy review designed to aid small businesses should begin with size exemptions. A good example of these efforts has recently occurred in West Virginia, where Governor Wise has embarked upon a statewide review of rules that negatively impact small businesses. One goal of this effort is to eliminate or reduce the regulatory and administrative burdens on small businesses.

One interesting analog to the size exemption is a pervasive ill-treatment of small businesses by state development officials across the nation. As an example, the State of West Virginia has adopted regulations that extend tax credits to firms with more than ten employees. While there should be a debate regarding the efficacy of tax credits of this nature, it is clear that exempting the majority of firms in West Virginia is in error. It is likely that these types of size restrictions that are common around the nation result from a basic misunderstanding of the role of manufacturing and trade that we attempt to dispel in this paper.

Also, anti-competitive behavior serves a barrier to entry to all firms. There is much misunderstanding surrounding firm size and anti-competitive behavior. While it is commonly believed that large retail stores and manufacturing firms engage in anti-competitive behavior as a rule, there is scant evidence to support this. Indeed, there is much to refute this notion.[14] It is more likely that regional anti-competitive behavior by incumbent firms (of all sizes) may prove a problem. In these cases, two important policy options may be considered. First, states must send a clear and unambiguous message regarding anti-trust enforcement. Second, special advocacy and analysis should be conducted by state attorneys general to identify and prosecute anti-competitive behavior at eh smallest level. Perhaps one of the best examples of this is West Virginia’s effort to examine gasoline prices at the local level, statewide.

Most importantly small businesses need a healthy and effective government, with clear and non-distortionary taxes and an effectively delivered suite of public services. This should result in a region with a healthy, well education population, with safe and well maintained roads and infrastructure. The presence of these factors will make it more likely that the dynamic and invaluable role of small manufacturers will aid in insuring prosperity and economic growth.

About the Author

Dr. Michael J. Hicks is the Director of Research, Center for Business and Economic Research at Marshall University and is an Associate Professor of Economic. He holds degrees in economics from Virginia Military Institute and the University of Tennessee. His research work has appeared in a number of academic and policy publications. Dr. Hicks has provided testimony to the U.S. Senate, the West Virginia Legislature and provided expert testimony in a "top 50" Tort case nationally. In 2002, Dr. Hicks, along with Mark Burton, was named as one of Marshall University's Distinguished Artists and Scholars. He was recently named by Governor Wise to the Special Reclamation Fund Council and was confirmed by the West Virginia Senate in 2003.

He is married to the former Janet Hicks, with whom he has a daughter, Morgan age 5, and two sons, Nathan, 3 and John, an infant. He is an army reserve infantryman currently assigned to the U.S. Army Japan. He is veteran of peacekeeping missions in the Middle East and Korea, and an infantry combat veteran of Desert Storm.

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[1] Notably small manufacturing firms are more likely to have their goods consumed locally, making them less likely to comprise part of the economic base. If you believe the economic base story of economic growth, then you should care little about small firms of any size.

[2] Ross Perot famously argued that the United States must both attract foreign investment and run a trade surplus. This sounds great, but since net foreign investment is defined as the negative of the net exports it is also impossible.

[3] If it is the pure commodity flow impact of trade that improves a region’s economy, then the world, as a whole, cannot grow. Who indeed, is the world trading with? Mars, Venus?

[4] For an interesting analysis of the institutions of this process, especially the role of overseas development representatives, see C. Keith Head, John C. Ries and Deborah L. Swenson, Attracting foreign manufacturing: Investment promotion and agglomeration, Regional Science and Urban Economics, 29 (1999) 195-218.

[5] This is the source of the factual comments by Sen. Rockefeller regarding the competitiveness of West Virginia firms.

[6] To test this hypothesis I performed a statistical test that evaluated whether or not a decline in manufacturing spawned a decline in services and vice-versa. In this test I was unable to reject the hypothesis that declines in manufacturing generated declines in services, but was able to reject the hypothesis that increases in manufacturing productivity saw concomitant increases in services productivity. I was also able to rule out equilibrium relationships between the two, but only very tentatively due to small sample sizes. The tests were autoregressive conditional heteroscedasticity tests and cointegration.

[7] See William L. Weber and Bruce R. Domazlicky, Total factor productivity growth in manufacturing: a regional approach using linear programming, Regional Science and Urban Economics, 29, (1999) 105-122.

[8] See Martin. Neil Baily, Eric J. Bartelsman and John Haltiwanger, Downsizing and Productivity Growth: Myth or Reality, Small Business Economics, 8, 259-278, 1996.

[9] Importantly, labor intensive industries, with high human capital requirements often pay much better than manufacturing. However, occupations in these industries typically require considerable educational and training investments that are time consuming and ill-suited to generating regional benefits since the workers are very mobile.

[10] This trend reduces the benefits an individual worker will experience from collective bargaining and may be largely responsible for the fifty percent decline in private sector union participation over the past two decades.

[11] The Center for Business and Economic Research has performed extensive surveys in the majority of West Virginia’s counties in conjunction with regional Workforce Investment Boards. These studies, performed in 2001-2003 repeatedly confirmed this observation.

[12] See “Small Business and Job Creation in the United States: The Role of New and Young” John Hjaltiwanger and C.J. Crizan. in Are Small Firms Important? Their Roal and Impact, ed. Zoltan J. Acs, 1999. Kluwer Academic Publishers.

[13] See Hicks, Michael J “Do Rural Areas in the U.S. Need Microfinance? Some Early Evidence from the CRA Data” Journal of International Banking Regulation, Vol 5(4) March 2004. Also see Hicks, Michael J. “Entrance, Exit and Merger Activity in Tennessee’s Banks: A Multivariate Analysis of Market Behavior and the Business Cycle” Journal of the Tennessee Economic Association, Fall 1999.

[14] See Hicks, Michael J. and Kristy Wilburn “The Locational Impact of Wal-Mart Entrance: A Panel Study of the Retail Trade Sector in West Virginia” Review of Regional Studies, Winter 2002