How do US state firearms laws affect firearms manufacturing location? An empirical investigation, 1986-2010

Abstract

We exploit variations in US state firearms laws to study their relation to the spatial distribution of more than 2700 federally licensed manufacturers of firearms for the civilian and law enforcement markets across the country. Accounting for a variety of economic factors¿such as cost, tax burden and agglomeration effects¿we find that states with relatively permissive, end-user friendly laws host more firearms manufacturing establishments than do states with relatively restrictive, end-user unfriendly laws. This supply side-oriented paper complements a literature that predominantly attends to the market's demand side. It thus opens up a new avenue to study the US civilian firearms market.