The explanation for spatial variations in regional and local area economic development has plagued geographers, economists, and regional scientists for years. Two theories of economic development-export base theory and growth pole theory-formed the foundation for inquiry into the subject for this research. In both theories, the role of manufacturing in local areas is key for economic development. Here is presented an attempt to illustrate a relationship between economic development and manufacturing, as a representative of all economic activities. Economic base theory emphasizes the importance of basic industries and growth pole theory emphasizes propulsive/driver industries to explain economic growth. The problem of explaining economic growth became then synonymous with the identification of basic and propulsive industries in this research.

Economic development was operationalized as per capita personal income (PCPI) and manufacturing was operationalized as number of establishments of two-digit SIC industries. A relative measure, the location quotient (LQ), was introduced as an additional measure of the independent variables and served three purposes: as a relative measure to eliminate size of a county as a factor, as a measure of specialization, and as a measure of export potential. The spatial unit of analysis is the county. The tools used for analysis were maps of the data, correlation, regression, and industry profile analysis of the top, middle, and bottom 20 counties in PCPI. Two time frames were used to bound the analysis. The first, short time frame consisted of two three year periods, 1967-70 and 1987-90, to compare manufacturing and PCPI. This short time frame analysis was the test for basic industries. The second, longer time frame consisted of change over time in all the variables 1967-90. This longer time frame analysis was the test for propulsive/driver industries.

The map analysis showed some correspondence between areas of high PCPI and certain types of manufacturing. The statistical evidence was unequivocally negative. There was no statistical relationship between PCPI and two-digit manufacturing establishments. To reconcile the two may require additional variables, different time frame, additional statistical refinements, or different spatial scale.