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Productivity Differences and Agglomeration Across Districts of Great Britain

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  • Lubomira Anastassova

Abstract

This paper examines the impact of employment density (agglomeration) on the hourly earnings of workers across districts of Great Britain. The potentially two-way causality between agglomeration and productivity is dealt with using two instruments: the total land area of a district and its population density. The estimated agglomeration effect is similar across different levels of territorial aggregation; however, the effect is stronger when looking only across Metropolitan areas. There is evidence of endogeneity only when the sample is split into Metropolitan and Non-Metropolitan areas and even so endogeneity has only little effect on the estimates.

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Bibliographic Info

Paper provided by The Center for Economic Research and Graduate Education - Economic Institute, Prague in its series CERGE-EI Working Papers with number wp289.

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Date of creation: Feb 2006
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Handle: RePEc:cer:papers:wp289

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Keywords: Agglomeration; Productivity; Multiple Instruments.;

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  1. Patricia Rice & Anthony J. Venables, 2004. "Spatial Determinants of Productivity: Analysis for the Regions of Great Britain," CEP Discussion Papers, Centre for Economic Performance, LSE dp0642, Centre for Economic Performance, LSE.
  2. K. Newey, Whitney, 1985. "Generalized method of moments specification testing," Journal of Econometrics, Elsevier, Elsevier, vol. 29(3), pages 229-256, September.
  3. Monastiriotis, Vassilis, 2000. "Inter- And Intra-Regional Wage Inequalities In The Uk: An Examination Of The Sources Of Uk Wage Inequalities And Their Evolution," ERSA conference papers ersa00p228, European Regional Science Association.
  4. Moomaw, Ronald L., 1985. "Firm location and city size: Reduced productivity advantages as a factor in the decline of manufacturing in urban areas," Journal of Urban Economics, Elsevier, vol. 17(1), pages 73-89, January.
  5. J. A. Hausman, 1976. "Specification Tests in Econometrics," Working papers, Massachusetts Institute of Technology (MIT), Department of Economics 185, Massachusetts Institute of Technology (MIT), Department of Economics.
  6. Gilles Duranton & Vassilis Monastiriotis, 2000. "Mind the gaps: the evolution of regional inequalities in the UK, 1982-1997," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 20135, London School of Economics and Political Science, LSE Library.
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Cited by:
  1. Raouf, BOUCEKKINE & David, DE LA CROIX & Dominique, PEETERS, 2005. "Early Literacy Achievements, Population Density and the Transition to Modern Growth," Discussion Papers (ECON - Département des Sciences Economiques), Université catholique de Louvain, Département des Sciences Economiques 2005023, Université catholique de Louvain, Département des Sciences Economiques.
  2. Kutsenko, E., 2012. "Path Dependence in Spatial Distribution of Economic Activity: Bad News for Empiric Research of Agglomeration Effects," Journal of the New Economic Association, New Economic Association, New Economic Association, vol. 14(2), pages 10-26.
  3. Neil Foster & Robert Stehrer, 2009. "Sectoral Productivity, Density and Agglomeration in the Wider Europe," Spatial Economic Analysis, Taylor & Francis Journals, Taylor & Francis Journals, vol. 4(4), pages 427-446.

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