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Industrial Location at the Intra-metropolitan Level: A Negative Binomial Approach

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  • Elisabet Viladecans Marsal
  • Josep Maria Arauzo Carod

Abstract

The objective of this paper is to analyse the influence of agglomeration economies on location decisions taken by new firms inside metropolitan areas. Following the literature, we consider that agglomeration economies are related to the concentration of an industry (location economies) and/or to the size of the city itself (urbanisation economies). As we assume that these economies differ according to firms' level of technology, our sample comprises new firms from high, intermediate and low technology industries. Our results confirm these sectoral differences and show some interesting location patterns for manufacturing firms. Taking into account the renewed interest in the influence of geography and distance in the location of economic activity, we introduce in our estimation the effect of the area's central city as a determinant for the location of new firms in the rest of the metropolitan area. This allows us to determine whether a suburbanisation effect exists and whether this effect remains the same regardless of the industry involved. Our main statistical source is the REI (Spanish Industrial Establishments Register), which provides plant-level microdata for the creation and location of new industrial firms.

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Paper provided by FEDEA in its series Studies on the Spanish Economy with number 224.

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Handle: RePEc:fda:fdaeee:224

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  1. Octavio Figueiredo & Paulo Guimaraes & Douglas Woodward, 2002. "Modeling industrial location decisions in U.S. counties," NIMA Working Papers 18, Núcleo de Investigação em Microeconomia Aplicada (NIMA), Universidade do Minho.
  2. Ángel Alañón & Rafael Myro, . "Does neighboring "industrial atmosphere" matter in industrial location?. Empirical evidence from Spanish municipalities," Studies on the Spanish Economy 199, FEDEA.
  3. Josep Maria Arauzo Carod, 2005. "Determinants of industrial location: An application for Catalan municipalities," Papers in Regional Science, Wiley Blackwell, vol. 84(1), pages 105-120, 03.
  4. Deitz, Richard, 1998. "A Joint Model of Residential and Employment Location in Urban Areas," Journal of Urban Economics, Elsevier, vol. 44(2), pages 197-215, September.
  5. 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.
  6. Arauzo Carod, Josep Maria & Manjón Antolín, Miguel C., 2001. "Firm Size and Geographical Aggregation: An Empirical Appraisal in Industrial Location," Working Papers 2072/1772, Universitat Rovira i Virgili, Department of Economics.
  7. Didier Baudewyns, 1999. "La localisation intra-urbaine des firmes: une estimation logit multinomiale," ULB Institutional Repository 2013/9157, ULB -- Universite Libre de Bruxelles.
  8. Guimaraes, Paulo & Figueiredo, Octavio & Woodward, Douglas, 2000. "Agglomeration and the Location of Foreign Direct Investment in Portugal," Journal of Urban Economics, Elsevier, vol. 47(1), pages 115-135, January.
  9. Cletus C. Coughlin & Eran Segev, 2000. "Location Determinants of New Foreign-Owned Manufacturing Plants," Journal of Regional Science, Wiley Blackwell, vol. 40(2), pages 323-351.
  10. Papke, Leslie E., 1991. "Interstate business tax differentials and new firm location : Evidence from panel data," Journal of Public Economics, Elsevier, vol. 45(1), pages 47-68, June.
  11. Holl, Adelheid, 2004. "Manufacturing location and impacts of road transport infrastructure: empirical evidence from Spain," Regional Science and Urban Economics, Elsevier, vol. 34(3), pages 341-363, May.
  12. Erickson, Rodney A. & Wasylenko, Michael, 1980. "Firm relocation and site selection in suburban municipalities," Journal of Urban Economics, Elsevier, vol. 8(1), pages 69-85, July.
  13. Stuart S. Rosenthal & William C. Strange, 2005. "The geography of entrepreneurship in the New York metropolitan area," Economic Policy Review, Federal Reserve Bank of New York, issue Dec, pages 29-53.
  14. Hans Ouwersloot & Piet Rietveld, 2000. "The Geography of R&D; Tobit Analysis and Bayesian Approach to Mapping R&D Activities for The Netherlands," Tinbergen Institute Discussion Papers 00-043/3, Tinbergen Institute.
  15. Figueiredo, Octavio & Guimaraes, Paulo & Woodward, Douglas, 2002. "Home-field advantage: location decisions of Portuguese entrepreneurs," Journal of Urban Economics, Elsevier, vol. 52(2), pages 341-361, September.
  16. 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.
  17. Elisabet Viladecans-Marsal, 2004. "Agglomeration economies and industrial location: city-level evidence," Journal of Economic Geography, Oxford University Press, vol. 4(5), pages 565-582, November.
  18. Bartik, Timothy J, 1985. "Business Location Decisions in the United States: Estimates of the Effects of Unionization, Taxes, and Other Characteristics of States," Journal of Business & Economic Statistics, American Statistical Association, vol. 3(1), pages 14-22, January.
  19. David Audretsch & Michael Fritsch, 2002. "Growth Regimes over Time and Space," Regional Studies, Taylor & Francis Journals, vol. 36(2), pages 113-124.
  20. Albert Solé-Ollé & Elisabet Viladecans-Marsal, 2004. "Central Cities as Engines of Metropolitan Area Growth," Journal of Regional Science, Wiley Blackwell, vol. 44(2), pages 321-350.
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