Differences in the Commuting Fields of Branch Plants and Indigenous Industrial Activity

Southeastern Geographer Vol. 23, No. 1, May 1983, pp. 10-25 DIFFERENCES IN THE COMMUTING FIELDS OF BRANCH PLANTS AND INDIGENOUS INDUSTRIAL ACTIVITY Robert G. Cromley and Roberta H. Webster After years of decline, the economic development of many rural areas has been stimulated directly by the expansion of economic activity and indirectly by the spatial redistribution of income through extended metropolitan commuting. (J) The increase in nonmetropolitan manufacturing between 1960 and 1980 has been cited as a major factor in the movement of people to these areas. (2) Thus, a primary goal of many industrial development ventures in rural areas has been to attract new manufacturing firms or expand existing ones. The establishment of rural industries is expected to stimulate growth in nonmetropolitan areas by increasing local employment through the direct hiring of workers from the indigenous labor force and by the indirect multiplier effects on employment in other sectors of the local economy. (3) However, the full realization of new jobs from manufacturing depends on the amount of forward linkages to local buyers and backward linkages to local suppliers . Branch plants contribute a majority of the new manufacturing jobs in nonmetropolitan areas (4), but the total employment multiplier associated with this type of activity is less than might be expected since it is externally controlled. At least as important as the total number of jobs created is determining who gets the jobs. One set of empirical studies has sought answers to this question by examining aspatial characteristics of the labor force, such as unemployment, income, and race, while other studies have examined the spatial distribution of an industry 's work force. (5) While researchers have studied the impact of branch plants on local communities with respect to capital and product flows, little research has been conducted to ascertain the extent of branch plant job losses for a host community due to the commuting pattern of its labor force. The purpose ofthis study is to analyze spatial differences Dr. Cromley is Assistant Professor ofGeography at the University ofKentucky in Lexington, KY 40506. Ms. Webster is a graduate student in the Department of Geography at the University of Kentucky in Lexington, KY 40506. Vol. XXIII, No. 1 11 in the labor force between branch versus indigenous manufacturing firms to determine the role each has in the distribution of nonmetropolitan growth impulses. BACKGROUND. Branch plant development in nonmetropolitan areas is characterized by Thompson as a "filter down process" where the spatial movment of firms is a response to changes in the critical input requirements of their product lines. (6) As production becomes standardized , increasing labor cost and competition in metropolitan areas may force a firm to move its production location to smaller places in the settlement hierarchy where labor competition is less and cheaper labor is more readily available. (7) Although production is relocated in rural areas, the corporate headquarters usually remain in the major metropolitan centers because any office functions still require the urbanization economies available in major cities. The dominance of nonmetropolitan economies by branch plants may have serious implications for the long-term economic growth of rural regions. Several studies have discussed the repercussions that external control of their industries may have for local communities. (8) Because control is maintained by external decision makers, branch plants are part of a larger system and are less tied to the local economy than indigenous firms. Branch plant connections with local suppliers and distributors may be less than that of an indigenous firm. Townroe's study of branch operations in the United Kingdom found that they have fewer local multipliers than firms that relocated in an area, although both types provided employment opportunities for both male and female workers. (9) While Townroe did not distinguish between the impact of branch plants in metropolitan and rural areas, other researchers have noted that the employment multipliers are much lower in rural communities where the new plant did not have local backward and forward linkages. (10) Although the lack of local ties by manufacturers is not unique to rural areas, it is more likely to occur in these areas where the economy lacks diversification and urbanization economies for attracting firms that require a variety...