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Spatial Localization in Manufacturing: A Cross-Country Analysis

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Author Info
Stefania Vitali ()
Mauro Napoletano ()
Giorgio Fagiolo ()

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Abstract

This paper employs a homogenous firms' database to investigate industry localiza- tion in European countries. More specifically, we compare, across industries and countries, the predictions of two of the most popular localization indices, i.e., the Ellison and Glaeser index (Ellison and Glaeser, 1997) and the Duranton and Over- man index (Duranton and Overman, 2005). We find that, independently from the index used, localization is a pervasive phenomenon in all countries studied, but the degree of localization is very uneven across industries in each country. Furthermore, we find that the two indices significantly diverge in predicting the intensity of the forces generating localization within each industry. Finally, we perform a cross- sectoral analysis of localized industries. We show that, in all countries, localized sectors are mainly "traditional" sectors (like jewelery, wine, and textiles) and sec- tors where scale economies are important. However, once one controls for countries' industrial structures science-based sectors turn out to be the most localized ones.

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Publisher Info
Paper provided by Utrecht University, Section of Economic Geography in its series Papers in Evolutionary Economic Geography (PEEG) with number 0906.

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Length: 37 pages
Date of creation: Jun 2009
Date of revision: Jun 2009
Handle: RePEc:egu:wpaper:0906

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Related research
Keywords: Industry Localization; Manufacturing Industries; Localization Indices; Spatial Concentration; Spatial correlation; Cross-country studies;

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Find related papers by JEL classification:
R12 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
R3 - Urban, Rural, and Regional Economics - - Production Analysis and Firm Location

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  6. Gilles Duranton, 2005. "Testing for Localization Using Micro-Geographic Data," Review of Economic Studies, Blackwell Publishing, vol. 72(4), pages 1077-1106, October. [Downloadable!] (restricted)
    Other versions:
  7. Ellison, Glenn & Glaeser, Edward L, 1997. "Geographic Concentration in U.S. Manufacturing Industries: A Dartboard Approach," Journal of Political Economy, University of Chicago Press, vol. 105(5), pages 889-927, October.
    Other versions:
  8. Steven Klepper, 2002. "The capabilities of new firms and the evolution of the US automobile industry," Industrial and Corporate Change, Oxford University Press, vol. 11(4), pages 645-666, August.
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  11. Guy Dumais & Glenn Ellison & Edward L. Glaeser, 2002. "Geographic Concentration As A Dynamic Process," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 193-204, May. [Downloadable!] (restricted)
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  14. Thomas J. Holmes & John J. Stevens, 2002. "Geographic Concentration and Establishment Scale," The Review of Economics and Statistics, MIT Press, vol. 84(4), pages 682-690, 07. [Downloadable!] (restricted)
  15. Barrios, Salvador & Bertinelli, Luisito & Strobl, E. & Teixeira, Antonio-Carlos, 2005. "The dynamics of agglomeration: evidence from Ireland and Portugal," Journal of Urban Economics, Elsevier, vol. 57(1), pages 170-188, January. [Downloadable!] (restricted)
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  16. Rosenthal, Stuart S. & Strange, William C., 2001. "The Determinants of Agglomeration," Journal of Urban Economics, Elsevier, vol. 50(2), pages 191-229, September. [Downloadable!] (restricted)
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