EXPANSION OF MARKETS AND THE GEOGRAPHIC-DISTRIBUTION OF ECONOMIC-ACTIVITIES - THE TRENDS IN US REGIONAL MANUFACTURING STRUCTURE, 1860-1987

This paper presents evidence on the long-run trends in U.S. regional s pecialization and localization and examines which model of regional sp ecialization is most consistent with the data. Regional specialization in the United States rose substantially between 1860 and the turn of the twentieth century, flattened out during the interwar years, and th en fell substantially and continuously since the 1930s. The analysis o f the long-run trends in U.S. regional specialization and localization supports explanations based on production scale economies and the Hec kscher-Ohlin model but is inconsistent with explanations based on exte rnal economies.