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The Dynamics of Local Employment in France

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Author Info
Combes, Pierre-Philippe
Magnac, Thierry
Robin, Jean-Marc

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Abstract

This Paper studies the impact of local economic structure on local sectoral employment growth. Local employment growth is decomposed into ‘internal’ growth (the growth of the size of existing plants) and ‘external’ growth (the creation of new plants). Using panel data methods, we estimate the dynamics of both variables simultaneously. Our observations refer to 36 manufacturing, trade and service sectors and 341 French ‘Employment Areas’ in every year between 1984 and 1993. Carefully specifying the short-run dynamics and controlling for fixed effects and endogeneity are proved to be critical devices. The low order of the selected model, an ARMA (1,1), implies that static externalities are prevalent compared to dynamic ones. Moreover, whereas fixed effects explain most of the spatial variation of plant size, plant creation is mainly determined by the current local economic structure. Policies targeted on the creation of new plants should therefore prove to be more rapidly efficient. For instance, large areas endowed with a small number of even size sectors and large leader firms transferring growth to smaller numerous plants experience larger growth.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3912.

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Date of creation: May 2003
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Handle: RePEc:cpr:ceprdp:3912

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Related research
Keywords: economic geography; employment; local labour markets; panel data;

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Find related papers by JEL classification:
C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data
D40 - Microeconomics - - Market Structure and Pricing - - - General
L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
R11 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Analysis of Growth, Development, and Changes

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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Martin, Philippe & Mayer, Thierry & Mayneris, Florian, 2008. "Spatial Concentration and Firm-Level Productivity in France," CEPR Discussion Papers 6858, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  2. Gilles Duranton, 2007. "Urban Evolutions: The Fast, the Slow, and the Still," American Economic Review, American Economic Association, vol. 97(1), pages 197-221, March. [Downloadable!]
  3. Brülhart, Marius & Mathys, Nicole Andréa, 2007. "Sectoral Agglomeration Economies in a Panel of European Regions," CEPR Discussion Papers 6410, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  4. Jens Suedekum, 2006. "Human Capital Externalities and Growth of High- and Low-Skilled Jobs," IZA Discussion Papers 1969, Institute for the Study of Labor (IZA). [Downloadable!]
  5. Stefano Federico & Gaetano Alfredo Minerva, 2008. "Outward FDI and Local Employment Growth in Italy," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 144(2), pages 295-324, July. [Downloadable!] (restricted)
    Other versions:
  6. Pierre-Philippe Combes & Thierry Magnac & Jean-Marc Robin, 2004. "The dynamics of local employment in France," Research Unit Working Papers 0402, Laboratoire d'Economie Appliquee, INRA. [Downloadable!]
    Other versions:
  7. Blien, Uwe & Sanner, Helge, 2006. "Structural change and regional employment dynamics," IAB Discussion Paper 200606, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]. [Downloadable!]
    Other versions:
  8. Uwe Blien & Jens Suedekum & Katja Wolf, 2005. "Local Employment Growth in West Germany: A Dynamic Panel Approach," IZA Discussion Papers 1723, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  9. Otto Raspe & Frank van Oort, 2006. "The Knowledge Economy and Urban Economic Growth," Papers in Evolutionary Economic Geography (PEEG) 0607, Utrecht University, Section of Economic Geography, revised Apr 2006. [Downloadable!]
  10. Jens Suedekum & Uwe Blien, 2005. "Local Economic Structure and Industry Development in Germany, 1993-2001," Economics Bulletin, Economics Bulletin, vol. 15(17), pages 1-8. [Downloadable!]
    Other versions:
  11. Kimhi, Ayal, 2008. "Has Debt Restructuring Facilitatead Structural Transformation on Israeli Family Farms?," Discussion Papers 37943, Hebrew University of Jerusalem, Department of Agricultural Economics and Management. [Downloadable!]
    Other versions:
  12. Pierre-Philippe Combes & Henry Overman, 2003. "The Spatial Distribution of Economic Activities in the European Union," CEP Discussion Papers dp0587, Centre for Economic Performance, LSE. [Downloadable!]
    Other versions:
  13. Overman, Henry G. & Rice, Patricia & Venables, Anthony J., 2008. "Economic Linkages Across Space," CEPR Discussion Papers 6786, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  14. Raffaele Paci & Stefano Usai, 2006. "Agglomeration economies and growth-The case of Italian local labour systems, 1991-2001," Working Paper CRENoS 200612, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia. [Downloadable!]
  15. Stefano Federico & Gaetano Alfredo Minerva, 2005. "Fear of Relocation? Assessing the Impact of Italy’s FDI on Local Employment," Working Papers 102, SEMEQ Department - Faculty of Economics - University of Eastern Piedmont. [Downloadable!]
  16. Daniel F. Heuermann, 2009. "Reinventing the Skilled Region: Human Capital Externalities and Industrial Change," Discussion Papers 200902, Institute of Labour Law and Industrial Relations in the European Community (IAAEG). [Downloadable!]
  17. Jens Suedekum, 2006. "Human Capital and Growth of High- and Low-Skilled Jobs in Cities," ERSA conference papers ersa06p69, European Regional Science Association. [Downloadable!]
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