Regional Industrial Dominance, Agglomeration Economies, and Manufacturing Plant Productivity
AbstractIn a seminal article, Benjamin Chinitz (1961) focused attention on the effects that industry size, structure, and economic diversification have on firm performance and regional economies. He also raised a related but conceptually distinct question that has been overlooked since: how does the extent to which a regional industry is concentrated in a single or small number of firms impact the performance of other local firms within that industry? He suggested that such regional industrial dominance may impact input prices, limit capital accessibility, deter entrepreneurial activity, and reduce the regional availability of agglomeration economies such as specialized labor and supply pools In this paper, we use an establishment-level production function to quantify the links between industrial dominance, agglomeration economies, and firm performance. We consider two questions. First, do greater levels of regional industrial dominance lead to lower economic performance by small, dominated manufacturing plants? Second, are small plants in dominated regional industries more limited in capturing regional agglomeration benefits and therefore do they face rigidities in deploying production factors to maximum advantage? Our results suggest that regional industrial organization does influence productivity but that the effect tends to be a direct one, rather than an indirect effect via its influence on agglomeration economies.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Center for Economic Studies, U.S. Census Bureau in its series Working Papers with number 07-31.
Length: 54 pages
Date of creation: Dec 2007
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-01-05 (All new papers)
- NEP-EFF-2008-01-05 (Efficiency & Productivity)
- NEP-ENT-2008-01-05 (Entrepreneurship)
- NEP-GEO-2008-01-05 (Economic Geography)
- NEP-TID-2008-01-05 (Technology & Industrial Dynamics)
- NEP-URE-2008-01-05 (Urban & Real Estate Economics)
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Drucker, Joshua & Feser, Edward, 2012. "Regional industrial structure and agglomeration economies: An analysis of productivity in three manufacturing industries," Regional Science and Urban Economics, Elsevier, vol. 42(1-2), pages 1-14.
- Edward L. Glaeser & William R. Kerr, 2009.
"Local Industrial Conditions and Entrepreneurship: How Much of the Spatial Distribution Can We Explain?,"
Journal of Economics & Management Strategy,
Wiley Blackwell, vol. 18(3), pages 623-663, 09.
- Edward L. Glaeser & William R. Kerr, 2008. "Local Industrial Conditions and Entrepreneurship: How Much of the Spatial Distribution Can We Explain?," Harvard Business School Working Papers 09-055, Harvard Business School.
- Edward Glaeser & William Kerr, 2008. "Local Industrial Conditions and Entrepreneurship: How Much of the Spatial Distribution Can We Explain?," Working Papers 08-37, Center for Economic Studies, U.S. Census Bureau.
- Edward L. Glaeser & William R. Kerr, 2008. "Local Industrial Conditions and Entrepreneurship: How Much of the Spatial Distribution Can We Explain?," NBER Working Papers 14407, National Bureau of Economic Research, Inc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Fariha Kamal).
If references are entirely missing, you can add them using this form.