Spatial Analysis of Forest Product Manufacturers in North Carolina

Spatial analysis of industrial locations is an important tool for cluster-based economic development that helps identify hot spots for attracting new businesses in a particular region. The forest product industry in North Carolina (NC) is the top employer among all manufacturing sectors, with a substantial contribution to the state economy. Using geographic information system tools, we examined the current spatial distribution of the primary and secondary forest product manufacturers (FPM) and available forest resources to identify major hot spots in NC. Additionally, by estimating count data models, this study evaluated factors influencing the location of FPMs across counties in NC. Our results suggested that primary FPMs exhibit a higher spatial dependency relative to secondary FPMs. Similarly, regression results suggested that the counties near cities with high population, hot spots of raw materials, and better county economy are more likely to host both primary and secondary FPMs in the counties of NC. The findings of this study shed light on how the clustering of forest product manufacturing firms may influence competition between FPMs, sustainable supply of raw materials, and supply-chain networks in forest-dependent rural regions. Study Implications: Results suggested that counties with a presence of primary forest product manufacturers are more likely to host secondary forest product manufacturers, which reinforces the coagglomeration of primary and secondary forest product manufacturers (FPMs) in North Carolina. The interaction between primary and secondary FPMs is therefore important for the sustainable supply-chain network in the forest product industry. Moreover, the identified hot spots, especially in counties that do not currently host a forest products industry, could be potential locations for new mills. As our findings suggest that roads are an important determinant in locating both primary and secondary FPMs, more investment in the transportation system could boost the forest product industry in certain counties in NC.