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Concentration, agglomeration and the size of plants

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  • Lafourcade, Miren
  • Mion, Giordano

Abstract

This paper investigates whether the geographic distribution of manufacturing activities depends on the size of plants. Using Italian data, we find, as in Kim [Kim, S., 1995. Expansion of markets and the geographic concentration of economic activities: the trends in U.S. regional manufacturing structure, 1860–1987, Quarterly Journal of Economics 110 (4), 881–908.], Holmes and Stevens [Holmes, T.J., and Stevens, J.J., 2002. Geographic concentration and establishment scale, Review of Economics and Statistics 84, 682–690.], and Holmes and Stevens [Holmes, T.J. and Stevens, J.J., 2004. Spatial distribution of economic activities in North America, in: J.V. Henderson and J.F. Thisse, eds., Handbook of Regional and Urban Economics, Vol.4, (Elsevier-North Holland, Amsterdam).], that large plants are more concentrated than small plants. However, considering distance-based patterns via spatial auto-correlation, we find that small establishments actually exhibit a greater tendency to be located in adjacent areas. These apparently contradictory findings raise a measurement issue regarding co-location externalities and suggest that large plants are more likely to cluster within narrow geographical units (concentration), while small establishments would rather co-locate within wider distance-based clusters (agglomeration). This picture is consistent with different size plants engaging in different transport-intensive activities.

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Bibliographic Info

Article provided by Elsevier in its journal Regional Science and Urban Economics.

Volume (Year): 37 (2007)
Issue (Month): 1 (January)
Pages: 46-68

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Handle: RePEc:eee:regeco:v:37:y:2007:i:1:p:46-68

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  1. Antonio Ciccone & Robert E. Hall, 1995. "Productivity and the density of economic activity," Economics Working Papers 120, Department of Economics and Business, Universitat Pompeu Fabra.
  2. Maurel, Francoise & Sedillot, Beatrice, 1999. "A measure of the geographic concentration in french manufacturing industries," Regional Science and Urban Economics, Elsevier, vol. 29(5), pages 575-604, September.
  3. Holmes, Thomas J. & Stevens, John J., 2004. "Spatial distribution of economic activities in North America," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 63, pages 2797-2843 Elsevier.
  4. Gilles Duranton & Henry G. Overman, 2005. "Testing for localization using micro-geographic data," LSE Research Online Documents on Economics 581, London School of Economics and Political Science, LSE Library.
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  8. Fujita, Masahisa & Mori, Tomoya & Henderson, J. Vernon & Kanemoto, Yoshitsugu, 2004. "Spatial distribution of economic activities in Japan and China," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 65, pages 2911-2977 Elsevier.
  9. Antonio Ciccone, 1998. "Agglomeration-effects in Europe," Economics Working Papers 499, Department of Economics and Business, Universitat Pompeu Fabra, revised Aug 1999.
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  11. Combes, Pierre-Philippe & Overman, Henry G., 2004. "The spatial distribution of economic activities in the European Union," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 64, pages 2845-2909 Elsevier.
  12. Eric Marcon & Florence Puech, 2003. "Evaluating the geographic concentration of industries using distance-based methods," Journal of Economic Geography, Oxford University Press, vol. 3(4), pages 409-428, October.
  13. Barrios, Salvador & Bertinelli, Luisito & Strobl, Eric & Teixeira, Antonio Carlos, 2004. "The dynamics of Agglomeration: Evidence from Ireland and Portugal," MPRA Paper 5706, University Library of Munich, Germany.
  14. Glenn Ellison & Edward L. Glaeser, 1994. "Geographic Concentration in U.S. Manufacturing Industries: A Dartboard Approach," NBER Working Papers 4840, National Bureau of Economic Research, Inc.
  15. Giuseppe Arbia, 2001. "articles: Modelling the geography of economic activities on a continuous space," Papers in Regional Science, Springer, vol. 80(4), pages 411-424.
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  17. repec:cor:louvrp:1963 is not listed on IDEAS
  18. Marcello Pagnini, 2003. "Misura e determinanti dell’agglomerazione spaziale nei comparti industriali in Italia," Rivista di Politica Economica, SIPI Spa, vol. 93(2), pages 149-, March-Apr.
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  20. BARRIOS, Salvador & BERTINELLI, Luisito & STROBL, Eric, 2003. "Geographic concentration and establishment scale: can panel data tell us more ?," CORE Discussion Papers 2003036, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  21. Thomas J. Holmes & John J. Stevens, 2002. "Geographic Concentration and Establishment Scale," The Review of Economics and Statistics, MIT Press, vol. 84(4), pages 682-690, November.
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Cited by:
  1. Izabella Szakálné Kanó & Zsófia Vas, 2013. "Spatial Distribution of Knowledge-Intensive Industries in Hungary," Transition Studies Review, Springer, vol. 19(4), pages 431-444, March.
  2. Wren, Colin, 2012. "Geographic concentration and the temporal scope of agglomeration economies: An index decomposition," Regional Science and Urban Economics, Elsevier, vol. 42(4), pages 681-690.
  3. Anne Leahy & Alfons Palangkaraya & Jongsay Yong, 2007. "Geographical Agglomeration in Australian Manufacturing," Melbourne Institute Working Paper Series wp2007n11, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  4. Stefania Vitali & Mauro Napoletano & Giorgio Fagiolo, 2013. "Spatial Localization in Manufacturing: A Cross-Country Analysis," Regional Studies, Taylor & Francis Journals, vol. 47(9), pages 1534-1554, October.
  5. Laura de Dominicis & Giuseppe Arbia & Henri L.F. de Groot, 2007. "The Spatial Distribution of Economic Activities in Italy," Tinbergen Institute Discussion Papers 07-094/3, Tinbergen Institute.
  6. Colin Wren, 2011. "Geographic Concentration and the Temporal Scope of Agglomeration Economics: An Index Decomposition," SERC Discussion Papers 0094, Spatial Economics Research Centre, LSE.
  7. Reinhold Kosfeld, 2012. "Identifying Clusters within R&D Intensive Industries Using Local Spatial Methods," ERSA conference papers ersa12p232, European Regional Science Association.
  8. Fu, Shihe & Hong, Junjie, 2008. "Testing urbanization economies in manufacturing industries: urban diversity or urban size?," MPRA Paper 10078, University Library of Munich, Germany.
  9. Valter Di Giacinto & Marcello Pagnini, 2008. "Agglomeration within and between regions: Two econometric based indicators," Temi di discussione (Economic working papers) 674, Bank of Italy, Economic Research and International Relations Area.
  10. Joshua Drucker, 2009. "Trends in Regional Industrial Concentration in the United States," Working Papers 09-06, Center for Economic Studies, U.S. Census Bureau.
  11. Zsofia Vas & Izabella Szakalne Kano, 2011. "Analyzing spatial distribution of knowledge-intensive industries in Hungary at sub-regional level," ERSA conference papers ersa10p1208, European Regional Science Association.
  12. Laura de Dominicis & Giuseppe Arbia & Henri L.F. de Groot, 2007. "The Spatial Distribution of Economic Activities in Italy," Tinbergen Institute Discussion Papers 07-094/3, Tinbergen Institute.
  13. 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.
  14. Di Giacinto, Valter & Pagnini, Marcello, 2011. "Local and global agglomeration patterns: Two econometrics-based indicators," Regional Science and Urban Economics, Elsevier, vol. 41(3), pages 266-280, May.
  15. Darko Tipurić & Mirjana Pejić Bach, 2009. "Changes in Industrial Concentration in the Croatian Economy (1995-2006)," EFZG Working Papers Series 0903, Faculty of Economics and Business, University of Zagreb.
  16. Li, Dongya & Lu, Yi & Wu, Mingqin, 2012. "Industrial agglomeration and firm size: Evidence from China," Regional Science and Urban Economics, Elsevier, vol. 42(1-2), pages 135-143.

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