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Vertical Industry Linkages: Sources of Productivity Gains and Cumulative Causation?

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  • Knarvik, K.H.M.
  • Steen, F.

Abstract

In this paper we analyse vertical industry linkages and the extent to which these work as channels for externalities. First, activity based externalities stemming from output growth and output level in vertically linked industries are tested for. Second, we aim at revealing the importance of a large home market for upstream industries. Eventually, by comparing results on localised inter-industry externalities as well as significance of local sales linkages, we try to identify to what extent the geographical agglomeration of an industry is self-reinforcing. A number of Norwegian maritime transport and services sectors are analysed. The results are promising in the sense that the model distinguishes empirically between different sources of externalities, and unveils which vertical linkages that give rise to endogenous agglomeration.

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Bibliographic Info

Paper provided by Norwegian School of Economics and Business Administration- in its series Papers with number 1/2000.

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Length: 19 pages
Date of creation: 2000
Date of revision:
Handle: RePEc:fth:norgee:1/2000

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Postal: NORWEGIAN SCHOOL OF ECONOMICS AND BUSINESS ADMINISTRATION, HELLEVEIEN 30, 5035 BERGEN SANDVIKEN NORWAY.
Phone: 5595 9000
Fax: 5595 9100
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Web page: http://www.nhh.no/
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Keywords: ECONOMIC GROWTH ; PRODUCTIVITY ; ECONOMIES OF SCALE;

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References

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  1. Caballero, R.J. & Lyons, R.K., 1989. "Internal Versus External Economies In European Industry," Discussion Papers 1989_10, Columbia University, Department of Economics.
  2. Klette, Tor Jakob, 1999. "Market Power, Scale Economies and Productivity: Estimates from a Panel of Establishment Data," Journal of Industrial Economics, Wiley Blackwell, vol. 47(4), pages 451-76, December.
  3. Paul Romer, 1989. "Endogenous Technological Change," NBER Working Papers 3210, National Bureau of Economic Research, Inc.
  4. Paul Krugman, 1990. "Increasing Returns and Economic Geography," NBER Working Papers 3275, National Bureau of Economic Research, Inc.
  5. Anthony J. Venables, 1993. "Equilibrium Locations of Vertically Linked Industries," CEP Discussion Papers dp0137, Centre for Economic Performance, LSE.
  6. Markusen, James R, 1989. "Trade in Producer Services and in Other Specialized Intermediate Inputs," American Economic Review, American Economic Association, vol. 79(1), pages 85-95, March.
  7. Susanto Basu & John G. Fernald, 1994. "Are apparent productive spillovers a figment of specification error?," International Finance Discussion Papers 463, Board of Governors of the Federal Reserve System (U.S.).
  8. 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.
  9. repec:att:wimass:8904 is not listed on IDEAS
  10. Knarvik, K.H.M. & Steen, F., 1997. "Self-reinforcing Agglomerations? An empirical industry study," Papers 14/97, Norwegian School of Economics and Business Administration-.
  11. S. W. Davies & Paul A. Geroski, 2000. "Changes In Concentration, Turbulence, And The Dynamics Of Market Shares," The Review of Economics and Statistics, MIT Press, vol. 79(3), pages 383-391, August.
  12. Gianmarco I. P. Ottaviano & Diego Puga, 1998. "Agglomeration in the Global Economy: A Survey of the 'New Economic Geography'," The World Economy, Wiley Blackwell, vol. 21(6), pages 707-731, 08.
  13. Baldwin, John R & Gorecki, Paul K, 1994. "Concentration and Mobility Statistics in Canada's Manufacturing Sector," Journal of Industrial Economics, Wiley Blackwell, vol. 42(1), pages 93-103, March.
  14. Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-70, May.
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Cited by:
  1. Görg, Holger & Hanley, Aoife, 2004. "Does Outsourcing Increase Profitability?," IZA Discussion Papers 1372, Institute for the Study of Labor (IZA).

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