Energy availability is more important than capital and skilled labor for the location of manufacturing industries in the U.S.
Energy reserves are distributed much more unevenly across U.S. states than physical capital and skilled labor, and the energy intensity of manufacturing sectors is also strongly skewed. Using data from 2001-2009, Thomas Michielsen finds that a one standard deviation increase in coal or natural gas reserves per capita, roughly corresponding to the difference in per-capita natural gas reserves between Texas […]
