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Identifying urbanisation and localisation externalities in manufacturing and service industries

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  • Daniel J Graham
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    Abstract

    This article estimates urbanisation and localisation economies for two digit manufacturing and service industries. The analysis is based on estimation of a translog production-inverse input demand system using data on British firms. We use distance-based measures of localisation to test for the spatial transmission of externalities. We identify positive localisation economies for 13 of the 27 sectors examined. The results indicate that where localisation economies exist, they tend to attenuate fairly rapidly with distance. All localisation externalities are identified within a 10 kilometre radius of the firm. Positive elasticities of productivity with respect to urbanisation are identified for 14 sectors. The weighted average localisation elasticity for manufacturing industries is 0.03 and for services 0.01. The mean urbanisation elasticities are 0.07 and 0.19 respectively. Copyright (c) 2008 the author(s). Journal compilation (c) 2008 RSAI.

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    Bibliographic Info

    Article provided by Wiley Blackwell in its journal Papers in Regional Science.

    Volume (Year): 88 (2009)
    Issue (Month): 1 (03)
    Pages: 63-84

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    Handle: RePEc:bla:presci:v:88:y:2009:i:1:p:63-84

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    Web page: http://www.blackwellpublishing.com/journal.asp?ref=1056-8190

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    Cited by:
    1. Richard Harris & John Moffat, 2011. "Plant-level Determinants of Total Factor Productivity in Great Britain, 1997-2006," SERC Discussion Papers 0064, Spatial Economics Research Centre, LSE.
    2. Anderstig, Christer & Berglund, Svante & Eliasson, Jonas & Andersson, Matts & Pyddoke, Roger, 2012. "Congestion charges and labour market imperfections: “Wider economic benefits” or “losses”?," Working papers in Transport Economics 2012:4, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
    3. Joshua Drucker, 2012. "The Spatial Extent of Agglomeration Economies: Evidence from Three U.S. Manufacturing Industries," Working Papers 12-01, Center for Economic Studies, U.S. Census Bureau.
    4. Rizov, Marian & Oskam, Arie & Walsh, Paul, 2012. "Is there a limit to agglomeration? Evidence from productivity of Dutch firms," Regional Science and Urban Economics, Elsevier, vol. 42(4), pages 595-606.
    5. Karsten Rusche & Uwe Kies & Andreas Schulte, 2011. "Measuring spatial co-agglomeration patterns by extending ESDA techniques," Jahrbuch für Regionalwissenschaft, Springer, vol. 31(1), pages 11-25, June.
    6. Dean Hanink & Robert Cromley & Avraham Ebenstein, 2012. "Wage-based evidence of returns to external scale in China’s manufacturing: a spatial analysis," The Annals of Regional Science, Springer, vol. 49(1), pages 1-16, August.
    7. Agarwalla, Astha, . "Agglomeration Economies and Productivity Growth in India," IIMA Working Papers WP2011-01-08, Indian Institute of Management Ahmedabad, Research and Publication Department.
    8. Matthias Duschl & Tobias Scholl & Thomas Brenner & Dennis Luxen & Falk Raschke, 2012. "Industry-specific firm growth and aggolmeration," Working Papers on Innovation and Space 2012-06, Philipps University Marburg, Department of Geography.

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