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Concentration, agglomeration and the size of plants

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  • Miren Lafourcade

    (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - École normale supérieure [ENS] - Paris, IUT - Département "Gestion, Logistique et Transports" - Université d'Evry-Val d'Essonne)

  • Giordano Mion

    (CORE - Center of Operation Research and Econometrics [Louvain] - Université Catholique de Louvain (UCL) - Belgique, FNRS - Fonds de la Recherche Scientifique - Fonds de la Recherche Scientifique [FNRS])

Abstract

This paper investigates whether the geographic distribution of manufacturing activities depends on the size of plants. Using Italian data we find, as in Kim (1995) and Holmes and Stevens (2002, 2004), that large plants are more concentrated than small plants. However, considering distance-based patterns via spatial auto-correlation, we find that small establishments actually exhibit a greater tendency to be located in adjacent areas. These apparently contradictory findings raise a measurement issue regarding co-location externalities, and suggest that large plants are more likely to cluster within narrow geographical units (concentration), while small establishments would rather co-locate within wider distance-based clusters (agglomeration). This picture is consistent with different size plants engaging in different transport-intensive activities.

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Bibliographic Info

Paper provided by HAL in its series PSE Working Papers with number halshs-00590572.

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Date of creation: Nov 2005
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Handle: RePEc:hal:psewpa:halshs-00590572

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Keywords: concentration ; spatial auto-correlation ; plant size;

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References

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  1. Richard E. Baldwin & Toshihiro Okubo, 2006. "Heterogeneous firms, agglomeration and economic geography: spatial selection and sorting," Journal of Economic Geography, Oxford University Press, vol. 6(3), pages 323-346, June.
  2. BARRIOS, Salvador & BERTINELLI, Luisito & STROBL, Eric & TEIXEIRA, Antonio Carlos, 2004. "The dynamics of agglomeration : evidence from Ireland and Portugal," CORE Discussion Papers 2004010, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  3. 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.
  4. Jonathan Eaton & Samuel Kortum, 2004. "An Anatomy of International Trade: Evidence from French Firms," 2004 Meeting Papers 802, Society for Economic Dynamics.
  5. 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.
  6. Antonio Ciccone & Robert E. Hall, 1993. "Productivity and the Density of Economic Activity," NBER Working Papers 4313, National Bureau of Economic Research, Inc.
  7. Giuseppe Arbia, 2001. "articles: Modelling the geography of economic activities on a continuous space," Papers in Regional Science, Springer, vol. 80(4), pages 411-424.
  8. Pierre-Philippe Combes & Miren Lafourcade, 2005. "Transport costs: measures, determinants, and regional policy implications for France," Journal of Economic Geography, Oxford University Press, vol. 5(3), pages 319-349, June.
  9. Ciccone, Antonio, 2002. "Agglomeration effects in Europe," European Economic Review, Elsevier, vol. 46(2), pages 213-227, February.
  10. 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, November.
  11. Michael P. Devereux & Rachel Griffith & Helen Simpson, 2000. "The Geographic Distribution of Production Activity in the UK," Econometric Society World Congress 2000 Contributed Papers 1397, Econometric Society.
  12. Gilles Duranton & Henry G. Overman, 2005. "Testing for Localization Using Micro-Geographic Data," Review of Economic Studies, Oxford University Press, vol. 72(4), pages 1077-1106.
  13. Fujita, Masahisa & Mori, Tomoya & Henderson, J. Vernon & Kanemoto, Yoshitsugu, 2004. "Spatial distribution of economic activities in Japan and China," 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 65, pages 2911-2977 Elsevier.
  14. Marcello Pagnini, 2003. "Misura e determinanti dell’agglomerazione spaziale nei comparti industriali in Italia," Rivista di Politica Economica, SIPI Spa, vol. 93(2), pages 149-, March-Apr.
  15. BARRIOS, Salvador & BERTINELLI, Luisito & STROBL, Eric, 2003. "Geographic concentration and establishment scale: can panel data tell us more ?," CORE Discussion Papers 2003036, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  16. Anne-Celia Disdier & Keith Head, 2008. "The puzzling persistence of the distance effect on bilateral trade," Working Papers 21709, Institut National de la Recherche Agronomique, France.
  17. Maurel, Francoise & Sedillot, Beatrice, 1999. "A measure of the geographic concentration in french manufacturing industries," Regional Science and Urban Economics, Elsevier, vol. 29(5), pages 575-604, September.
  18. Holmes, Thomas J. & Stevens, John J., 2004. "Spatial distribution of economic activities in North America," 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 63, pages 2797-2843 Elsevier.
  19. Anthony J. Venables & Henry G. Overman & Karen Helen Midelfart-Knarvik & Stephen Redding, 2002. "Integration and Industrial Specialisation in the European Union," Revue Économique, Programme National Persée, vol. 53(3), pages 469-481.
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  21. Eric Marcon & Florence Puech, 2003. "Evaluating the geographic concentration of industries using distance-based methods," Journal of Economic Geography, Oxford University Press, vol. 3(4), pages 409-428, October.
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Citations

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Cited by:
  1. Laura de Dominicis & Giuseppe Arbia & Henri L.F. de Groot, 2007. "The Spatial Distribution of Economic Activities in Italy," Tinbergen Institute Discussion Papers 07-094/3, Tinbergen Institute.
  2. Stefania Vitali & Mauro Napoletano & Giorgio Fagiolo, 2009. "Spatial Localization in Manufacturing: A Cross-Country Analysis," Documents de Travail de l'OFCE 2009-07, Observatoire Francais des Conjonctures Economiques (OFCE).
  3. Anne Leahy & Alfons Palangkaraya & Jongsay Yong, 2010. "Geographical Agglomeration in Australian Manufacturing," Regional Studies, Taylor & Francis Journals, vol. 44(3), pages 299-314.
  4. Darko Tipurić & Mirjana Pejić Bach, 2009. "Changes in Industrial Concentration in the Croatian Economy (1995-2006)," EFZG Working Papers Series 0903, Faculty of Economics and Business, University of Zagreb.
  5. Li, Dongya & Lu, Yi & Wu, Mingqin, 2012. "Industrial agglomeration and firm size: Evidence from China," Regional Science and Urban Economics, Elsevier, vol. 42(1-2), pages 135-143.
  6. Reinhold Kosfeld, 2012. "Identifying Clusters within R&D Intensive Industries Using Local Spatial Methods," ERSA conference papers ersa12p232, European Regional Science Association.
  7. Joshua Drucker, 2009. "Trends in Regional Industrial Concentration in the United States," Working Papers 09-06, Center for Economic Studies, U.S. Census Bureau.
  8. Valter Di Giacinto & Marcello Pagnini, 2008. "Agglomeration within and between regions: Two econometric based indicators," Temi di discussione (Economic working papers) 674, Bank of Italy, Economic Research and International Relations Area.
  9. Izabella Szakálné Kanó & Zsófia Vas, 2013. "Spatial Distribution of Knowledge-Intensive Industries in Hungary," Transition Studies Review, Springer, vol. 19(4), pages 431-444, March.
  10. Laura de Dominicis & Giuseppe Arbia & Henri L.F. de Groot, 2007. "The Spatial Distribution of Economic Activities in Italy," Tinbergen Institute Discussion Papers 07-094/3, Tinbergen Institute.
  11. Di Giacinto, Valter & Pagnini, Marcello, 2011. "Local and global agglomeration patterns: Two econometrics-based indicators," Regional Science and Urban Economics, Elsevier, vol. 41(3), pages 266-280, May.
  12. Zsofia Vas & Izabella Szakalne Kano, 2011. "Analyzing spatial distribution of knowledge-intensive industries in Hungary at sub-regional level," ERSA conference papers ersa10p1208, European Regional Science Association.
  13. Karsten Rusche & Uwe Kies & Andreas Schulte, 2011. "Measuring spatial co-agglomeration patterns by extending ESDA techniques," Jahrbuch für Regionalwissenschaft, Springer, vol. 31(1), pages 11-25, June.
  14. Colin Wren, 2011. "Geographic Concentration and the Temporal Scope of Agglomeration Economics: An Index Decomposition," SERC Discussion Papers 0094, Spatial Economics Research Centre, LSE.
  15. Shihe Fu & Junjie Hong, 2010. "Testing Urbanization Economies in Manufacturing Industries: Urban Diversity or Urban Size?," EERI Research Paper Series EERI_RP_2010_38, Economics and Econometrics Research Institute (EERI), Brussels.
  16. Wren, Colin, 2012. "Geographic concentration and the temporal scope of agglomeration economies: An index decomposition," Regional Science and Urban Economics, Elsevier, vol. 42(4), pages 681-690.

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