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The Neighborhood or the Region? Untangling the density-productivity relationship using geocoded data

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  • Larsson, Johan P.

    ()
    (Centre for Entrepreneurship and Spatial Economics (CEnSE), Jönköping International Business School.)

Abstract

I analyze the effects of sub-city level density of economic activity on worker productivity. Using a geocoded dataset on employment and wages in the city areas of Sweden, the analysis is based on squares representing “neighborhoods” (0.0625 km2), “districts” (1 km2), and “agglomerations” (10 km2). The wage-density elasticity depends crucially on spatial resolution, with the elasticity being highest in neighborhood squares. The results are consistent with i) the existence of a localized density spillover effect and ii) quite sharp attenuation of human capital spillovers. An implication of the findings is that if the data source is not sufficiently disaggregated, analyses of the density-productivity link risk understating the benefits of working in dense parts of regions, such as the central business districts.

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Bibliographic Info

Paper provided by Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies in its series Working Paper Series in Economics and Institutions of Innovation with number 318.

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Length: 21 pages
Date of creation: 12 Jun 2013
Date of revision:
Handle: RePEc:hhs:cesisp:0318

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Postal: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology, SE-100 44 Stockholm, Sweden
Phone: +46 8 790 95 63
Web page: http://www.infra.kth.se/cesis/
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Related research

Keywords: Density; productivity; spatial dependence; geo-coded data; neighborhood effects; human capital; agglomeration economies;

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  1. Roberta Capello, 2002. "Entrepreneurship and spatial externalities: Theory and measurement," The Annals of Regional Science, Springer, vol. 36(3), pages 387-402.
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  9. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters, in: Schooling, Experience, and Earnings, pages 1-4 National Bureau of Economic Research, Inc.
  10. Rauch James E., 1993. "Productivity Gains from Geographic Concentration of Human Capital: Evidence from the Cities," Journal of Urban Economics, Elsevier, vol. 34(3), pages 380-400, November.
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  12. Andersson, Martin & Klaesson, Johan & P. Larsson, Johan, 2012. "How Local are Spatial Density Externalities? evidence from square grid data," CIRCLE Electronic Working Papers 2012/10, Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy.
  13. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1.
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