Economic effects of an industrial plant locating in a rural county

Since the end of World War II, there has been a measurable tendency for new manufacturing plants to be built in rural areas in the South. The predominantly rural and agricultural counties of Virginia have a considerably higher proportion of the new plants than they had of the total number of manufacturing plants in 1950.1 In Virginia, this trend has been aided by the Division of Industrial Development and Planning, and industrial departments of railroads and electric utilities, which have used their influence to encourage the building of new manufacturing plants in low-income rural areas when economically feasible. In the 1950 to 1962 period, a total of 445 new plants with 51,925 employees located in Virginia. 2 They vary greatly in size - from 5 employees to 3,300 - with the majority in the smaller size group. Although large in number, the smaller plants have had much less impact on employment than the few large plants. The 15 plants with more than 500 employees represent only three per cent of the new plants but account for one-third of the new plant employment. The reverse is true for plants with less than 25 employees. They represent one-third of the new plants but account for only three per cent of the new employment. Rural areas isolated from medium sized cities and towns secured only a small percentage of the new plant employment - they lack the manpower, utilities, and ancillary services needed by a large plant. Also, some firms hesitate to locate in an area where they will be the principal employer. The objective of this paper is to determine the economic effects of an industrial plant locating in a predominantly rural county