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The mysteries of the trade: employment effects of urban interindustry spillovers

Author

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  • Dauth, Wolfgang

    (Institute for Employment Research (IAB), Nuremberg, Germany ; University of Erlangen-Nuremberg)

Abstract

"Theories in regional science predict that related establishments benefit from their mutual proximity due to forward-backward linkages, labor market pooling and knowledge spillovers (the Marshallian forces). While the existence of these externalities as a whole is well supported by the empirical literature, there are few studies that discriminate between separate explanations. This paper introduces a new approach to assess the importance and magnitude of each of the Marshallian forces separately. Instead of measuring external economies of scale that take place within single industries, it models spillovers that happen between co-located industries. To this end, methods of spatial econometrics are adopted to measure interindustry relationships in employment growth between 55 industries of the manufacturing and service sectors in the labor market regions of the five largest cities in western Germany in the years 1989 to 2006. In this context, the strength of these relations is determined by economic closeness rather than by geography. The results suggest that each of the three Marshallian forces help to explain agglomeration externalities." (Author's abstract, IAB-Doku) ((en))

Suggested Citation

  • Dauth, Wolfgang, 2010. "The mysteries of the trade: employment effects of urban interindustry spillovers," IAB-Discussion Paper 201015, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    • Handle: RePEc:iab:iabdpa:201015
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    References listed on IDEAS

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    Cited by:

    1. Ehrl, Philipp, 2013. "Agglomeration economies with consistent productivity estimates," Regional Science and Urban Economics, Elsevier, vol. 43(5), pages 751-763.
    2. Neffke, Frank M.H. & Otto, Anne & Weyh, Antje, 2017. "Inter-industry labor flows," Journal of Economic Behavior & Organization, Elsevier, vol. 142(C), pages 275-292.
    3. Oliver Ludewig & Antje Weyh, 2011. "Die regionale Arbeitsplatzdynamik in Deutschland – Mehr Bewegung im Osten," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 31(1), pages 27-56, June.
    4. Frank Neffke & Matté Hartog & Ron Boschma & Martin Henning, 2018. "Agents of Structural Change: The Role of Firms and Entrepreneurs in Regional Diversification," Economic Geography, Taylor & Francis Journals, vol. 94(1), pages 23-48, January.
    5. Frank Neffke & Anne Otto & Cesar A. Hidalgo, 2016. "The Mobility of Displaced Workers: How the Local Industry Mix Affects Job Search Strategies," CID Working Papers 71, Center for International Development at Harvard University.
    6. Frank Neffke & Martin Henning, 2011. "Inter-industry linkages in local economies," ERSA conference papers ersa11p1075, European Regional Science Association.

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    More about this item

    Keywords

    Baden-Württemberg ; Bayern ; Bundesrepublik Deutschland ; Frankfurt/Main ; Hamburg ; Hessen ; Köln ; München ; Nordrhein-Westfalen ; Stuttgart ; Westdeutschland ; Ballungsraum ; Beschäftigungseffekte ; Handel ; IAB-Betriebs-Historik-Panel ; regionales Cluster ; Regionalforschung ; Stadtregion ; Arbeitsmarktregion ; Wirtschaftszweige ; Wissenstransfer ; Zulieferer ; zwischenbetriebliche Kooperation ; 1989-2006;
    All these keywords.

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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