Evolution, Process Variety, and Regional Trajectories of Technological Change in U.S. Manufacturing

Abstract

Technological variety is a central component in evolutionary accounts of economic growth and change. Without variety, the process of selection, by which certain products and processes of production are favored in the market, cannot operate. Empirical analysis confirms that U.S. production technology, measured by a pair of capital and labor input coefficients, varies markedly over space. Furthermore, the relative positions of regions in a two-dimensional technology-space appears consistent across industries. With industry-mix effects partially removed, multivariate analysis of variance confirms that regional differences in production techniques are statistically significant. Additional investigation reveals that spatial variations in techniques of production persist over time. These findings support the claims of evolutionary theorists, demonstrating that in U.S. manufacturing industries regions tend to move along distinct trajectories of technological change.