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On the scope of agglomeration economies: Evidence from Catalan zip codes

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  • Jordi Jofre Monseny

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    (Institut d'Economia de Barcelona (IEB); Universitat de Barcelona (UB))

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    Abstract

    This paper aims at studying the scope of agglomerations economies empirically. In particular, two issues are explored. First, the industrial scope of agglomeration economies is analysed, by comparing the effects arising from co-localization of same industry firms (localization economies) to the benefits derived from large and diversified economic environments (urbanization/Jacobs diversity effects). Second, the geographic scope of these external effects is studied. These issues are addressed by studying the effects of local industrial characteristics on the one number of births of new establishments in the subsequent period. A theoretical framework is used to interpret regression results in terms of scale effects (productivity shifters). Econometric estimations are carried out, separately, for seven industries for Catalonia, which is a Spanish region, using 1997-2000 data. Evidence of localization, urbanization and diversity effects has been found. Agglomeration economies seem to work at a very local level.

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    File URL: http://ieb.ub.edu/aplicacio/fitxers/269261ART106.pdf
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    Bibliographic Info

    Paper provided by Institut d'Economia de Barcelona (IEB) in its series Working Papers with number 2005/4.

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    Length: 39 pages
    Date of creation: 2005
    Date of revision:
    Handle: RePEc:ieb:wpaper:269261art106

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    Related research

    Keywords: Agglomeration economies; Firm creation; Poisson regression;

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    1. Moomaw, Ronald L., 1983. "Is population scale a worthless surrogate for business agglomeration economies?," Regional Science and Urban Economics, Elsevier, vol. 13(4), pages 525-545, November.
    2. 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.
    3. Gilles Duranton & Diego Puga, . "DIVERSITY AND SPECIALISATION IN CITIES. Why, where and when does it matter?," UFAE and IAE Working Papers 443.99, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    4. Coughlin, Cletus C & Terza, Joseph V & Arromdee, Vachira, 1991. "State Characteristics and the Location of Foreign Direct Investment within the United States," The Review of Economics and Statistics, MIT Press, vol. 73(4), pages 675-83, November.
    5. Michael Devereux & Rachel Griffith & Helen Simpson, 2004. "Agglomeration, regional grants and firm location," IFS Working Papers W04/06, Institute for Fiscal Studies.
    6. Edward L. Glaeser & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1991. "Growth in Cities," NBER Working Papers 3787, National Bureau of Economic Research, Inc.
      • Glaeser, Edward Ludwig & Kallal, Hedi D. & Scheinkman, Jose A. & Shleifer, Andrei, 1992. "Growth in Cities," Scholarly Articles 3451309, Harvard University Department of Economics.
    7. Duranton, Gilles & Puga, Diego, 2004. "Micro-foundations of urban 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 48, pages 2063-2117 Elsevier.
    8. Stuart S. Rosenthal & William C. Strange, 2003. "Geography, Industrial Organization, and Agglomeration," Center for Policy Research Working Papers 56, Center for Policy Research, Maxwell School, Syracuse University.
    9. Combes, Pierre-Philippe, 2000. "Economic Structure and Local Growth: France, 1984-1993," Journal of Urban Economics, Elsevier, vol. 47(3), pages 329-355, May.
    10. Carlton, Dennis W, 1983. "The Location and Employment Choices of New Firms: An Econometric Model with Discrete and Continuous Endogenous Variables," The Review of Economics and Statistics, MIT Press, vol. 65(3), pages 440-49, August.
    11. J. Vernon Henderson & Ari Kuncoro & Matthew Turner, 1992. "Industrial Development in Cities," NBER Working Papers 4178, National Bureau of Economic Research, Inc.
    12. 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.
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