Doctoral Dissertations

Date of Award

3-1980

Degree Type

Dissertation

Degree Name

Doctor of Philosophy

Major

Agricultural Economics

Major Professor

Thomas Klindt

Committee Members

Merton Badenhop, Charles Sappington, Henry Herzog Jr

Abstract

Rural industrialization in Tennessee is expected to contribute to economic growth in rural counties by more than offsetting declining agricultural employment. Not all the rural counties in Tennessee are expected to increase their industrial employment levels by the same magnitude, however. The critical factor influencing the future course of industrial growth in any rural county is its past economic structure. Relatively little is known about the economic structure of rural Tennessee counties or the extent to which the past economic structure may influence industrial growth.

In order to develop an understanding of the determinants of rural industrial growth, the economic structure of rural Tennessee counties was measured by applying a factor analysis to 40 economic variables describing rural communities at two points in time–1960 and 1970. Three interpre-table factors resulted which described: 1) the nature of the industrial structure of each rural county and those contiguous counties, 2) the expenditures made on the infrastructure by local governments, and 3) the quality or productivity of the local labor force.

The latter two of the factors were then shown to be responsible for the distribution of the total level of manufacturing employment in the state among the 76 rural Tennessee counties. The 1960 values explained the distribution of manufacturing employment for the 1965 to 1970 period and the 1970 values for the 1971 to 1976 period. Furthermore, the rural counties with higher factor scores tended to be geographically concentrated, thus illustrating the hypothesis that manufacturing growth occurs in regional "matrices of development."

Manufacturing employment projections were made for each of 56 rural counties for the years 1977 to 1981 by using projections of manufacturing employment from the Tennessee Econometric Model. These projections were then used as exogenous variables in a six-equation simultaneous system to project rural employment levels for the following industries: retail trade, wholesale trade, construction, finance, services, and miscellaneous. The accuracy of the 1977 projections for all seven industries was analyzed in order to validate the model. Acceptable margins of error were calculated.

Although much rigor is still required in developing models of rural industrial growth, the concepts used in this study appear to be sound, although in need of refinement. They are intended to form a groundwork for other studies focusing on the issue of the determinants of rural industrial growth.

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