Common Trends and Linkages in the US Manufacturing Sector, 1969–2000

Abstract

Manufacturing employment series may reflect economically significant trends over time. This proposition is tested using annual employment data for 20 US industrial sectors in the 50 states covering the period 1969–2000. First, we test whether the individual state employment series follow Gibrat’s Law. Our results suggest that this is mainly the case. Secondly, we establish whether the series taken two‐by‐two share common stochastic trends and linkages over time. Our main conclusion is that significant relationships, of intra‐ and inter‐industrial nature, are observable in US manufacturing. Finally, we also find a substitution relationship between both types of linkages.

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