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Selection and Agglomeration Impact on Firm's Productivity: A Study of Taiwan's Manufacturing Sector

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  • Hasan, Syed
  • Klaiber, H.Allen
  • Sheldon, Ian

Abstract

This paper studies the impact of agglomeration and selection on firms' total factor productivity (TFP) distributions depending on their spatial location, specifically in science parks and large cities in Taiwan. The TFP distributions indicate a mean-shift and greater dispersion whenever firms benefit from agglomeration economies. However, selection due to competition may cause left truncation of the distribution. The empirical analysis shows that firms located in science parks have productivity that lags compared to those located in large cities and they benefit mainly from localization externalities.

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Bibliographic Info

Paper provided by Agricultural and Applied Economics Association in its series 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. with number 149743.

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Date of creation: 2013
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Handle: RePEc:ags:aaea13:149743

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Keywords: Agglomeration; Selection; Total Factor Productivity; Science Park; Community/Rural/Urban Development; Productivity Analysis; D24; R58; R12;

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  1. Pierre Philippe Combes & Gilles Duranton & Laurent Gobillon & Diego Puga & Sébastien Roux, 2009. "The productivity advantages of large cities: Distinguishing agglomeration from firm selection," Working Papers 2009-02, Instituto Madrileño de Estudios Avanzados (IMDEA) Ciencias Sociales, revised 30 Nov 2010.
  2. Chad Syverson, 2004. "Market Structure and Productivity: A Concrete Example," NBER Working Papers 10501, National Bureau of Economic Research, Inc.
  3. Marc J. Melitz & Gianmarco I.P. Ottaviano, 2005. "Market Size, Trade, and Productivity," Development Working Papers 201, Centro Studi Luca d\'Agliano, University of Milano.
  4. Fujita, Masahisa & Ogawa, Hideaki, 1982. "Multiple equilibria and structural transition of non-monocentric urban configurations," Regional Science and Urban Economics, Elsevier, vol. 12(2), pages 161-196, May.
  5. Olley, G Steven & Pakes, Ariel, 1996. "The Dynamics of Productivity in the Telecommunications Equipment Industry," Econometrica, Econometric Society, vol. 64(6), pages 1263-97, November.
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