Investment and Disinvestment in New York,1960-80

Abstract

Job loss and plant closings have, until recently, been considered part of the inevitable cycle adjustments of economic growth. Since the late 1970s, however, a multifaceted debate has developed relating to the possible permanence of industrial decline in the American Northeast. Postindustrial and product life-cycle theories maintain an optimistic perspective predicting offsetting job gains in new sectors; while capital mobility theory predicts accelerated job loss and long-term depression. Evidence from the New York State Industrial Migration File offers little cause for optimism. Between 1960 and 1980, state job capacity declined by 200,000, a result of both an increase in disinvestment and a decrease in new investment. Contraction took place in every region and industrial sector. There is questionable evidence of compensatory expansion to offset contraction during most years as a consequence of physical changes in plant and equipment investment. Multilocal firms showed a much greater propensity to disinvest than local firms, suggesting support for capital mobility theory.

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References

1. Frank Blackaby , ed., Deindustrialisation (London: Heinemann, 1979).

2. The data reported in this article are from the Industrial Migration File, a set of reports collected by the field offices of the New York State Department of Commerce. The data reported detail physical changes in industrial facilities.

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8. For a succinct overview of the measures suggested, see “Industrial Policy: A Cliche for All Candidates,” Economist, pp. 20-22 (5 Nov. 1983).

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10. Benjamin Chinitz , “Manufacturing Employment in New York State: The Anatomy of Decline,” in The Declining Northeast, ed. Chinitz , p. 45.

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11. Ibid., p. 55, tab. 2.6; see also tab. 1.

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12. D. H. Garnick , “The Northeast States in the National Context,” in The Declining Northeast, ed. Chinitz , pp. 145-159.

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13. Candee S. Harris , “The Magnitude of Job Loss from Plant Closings and the Generation of Replacement Jobs: Some Recent Evidence,” in this issue of The Annals of the American Academy of Political and Social Science; Bluestone and Harrison , Deindustrialization of America.

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14. These results can be considered as minimum estimates of the significance of the presence of parent companies; this variable omits parent names for many cases, especially when the subsidiary has the same name as its parent company.

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15. F. S. Leichter , New York's Corporate Investment Tax Credits: Millions Down the Drain (Albany: New York State Senate, 1983), app. tabs. 2-4.