This paper estimates the impact of large plant closures on the local employment in the affected industry. Specifically, we examine the closure of 45 large manufacturing plants in Spain which relocated abroad between 2001 and 2006. We run differences-indifferences specifications in which locations that experience a closure are matched to locations with similar pre-treatment employment levels and trends. The results show that when a plant closes, for each job directly lost in the plant closure, only between 0.6 and 0.7 jobs are actually lost in the local affected industry. These effects are driven by employment expansions in local incumbent firms and, to a lesser extent, by the creation of new firms in the local industry. ? The Author (2017). Published by Oxford University Press. All rights reserved.

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1 January 2018

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Journal of Economic Geography 18(1) , pp.163-186, 2018

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DOI: 10.1093/jeg/lbx026

https://academic.oup.com/joeg/article/18/1/163/4079909

This Journal article is published under the centre's Urban programme.