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Spatial Determinants of Productivity: Analysis for the Regions of Great Britain

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  • Patricia Rice
  • Anthony J. Venables

Abstract

This paper uses NUTS3 sub-regional data for Great Britain to analyse the determinants of spatialvariations in income and productivity. We decompose the spatial variation of earnings into aproductivity effect and an occupational composition effect. For the former (but not the latter) wefind a robust relationship with proximity to economic mass, suggesting that doubling thepopulation of working age proximate to an area is associated with a 3.5% increase in productivityin the area. We measure proximity by travel time, and show that effects decline steeply with time,ceasing to be important beyond approximately 80 minutes.

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Bibliographic Info

Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0642.

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Date of creation: Jul 2004
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Handle: RePEc:cep:cepdps:dp0642

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Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP

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Keywords: regional disparities; productivity; clustering;

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References

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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.
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  3. Henderson, J V, 1974. "The Sizes and Types of Cities," American Economic Review, American Economic Association, vol. 64(4), pages 640-56, September.
  4. Stuart S. Rosenthal & William C. Strange, 1999. "Geography, Industrial Organization, and Agglomeration," Center for Policy Research Working Papers 14, Center for Policy Research, Maxwell School, Syracuse University.
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  6. Andrew Bernard & Stephen Redding & Peter Schott & Helen Simpson, 2002. "Factor price equalisation in the UK," IFS Working Papers W02/11, Institute for Fiscal Studies.
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  8. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June.
  9. Enrico Moretti, 2003. "Human Capital Externalities in Cities," NBER Working Papers 9641, National Bureau of Economic Research, Inc.
  10. Edward L. Glaeser & David C. Mare, 1994. "Cities and Skills," NBER Working Papers 4728, National Bureau of Economic Research, Inc.
  11. Redding, Stephen & Venables, Anthony J., 2004. "Economic geography and international inequality," Journal of International Economics, Elsevier, vol. 62(1), pages 53-82, January.
  12. Masahisa Fujita & Paul Krugman & Anthony J. Venables, 2001. "The Spatial Economy: Cities, Regions, and International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262561476, December.
  13. Bernard Fingleton, 2001. "Equilibrium and Economic Growth: Spatial Econometric Models and Simulations," Journal of Regional Science, Wiley Blackwell, vol. 41(1), pages 117-147.
  14. Roland Andersson & John M. Quigley & Mats Wilhelmson, 2004. "University decentralization as regional policy: the Swedish experiment," Journal of Economic Geography, Oxford University Press, vol. 4(4), pages 371-388, August.
  15. Bernard Fingleton, 2003. "Increasing returns: evidence from local wage rates in Great Britain," Oxford Economic Papers, Oxford University Press, vol. 55(4), pages 716-739, October.
  16. Wheaton, William C. & Lewis, Mark J., 2002. "Urban Wages and Labor Market Agglomeration," Journal of Urban Economics, Elsevier, vol. 51(3), pages 542-562, May.
  17. Rosenthal, Stuart S. & Strange, William C., 2004. "Evidence on the nature and sources of agglomeration economies," 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 49, pages 2119-2171 Elsevier.
  18. Combes, Pierre-Philippe & Duranton, Gilles & Gobillon, Laurent, 2008. "Spatial wage disparities: Sorting matters!," Journal of Urban Economics, Elsevier, vol. 63(2), pages 723-742, March.
  19. Patricia Rice & Anthony Venables, 2003. "Equilibrium Regional Disparities: Theory and British Evidence," Regional Studies, Taylor & Francis Journals, vol. 37(6-7), pages 675-686.
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