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The Dynamics of Local Employment in France

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Author Info
Combes, Pierre-Philippe (CERAS-ENPC, CNRS and CEPR)
Magnac, Thierry () (INRA, CREST-INSEE, CEPR and IZA Bonn)
Robin, Jean-Marc (University of Paris 1, CREST-INSEE, CEPR and IZA Bonn)

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Abstract

We study the impact of local economic structure on employment dynamics. Local employment is decomposed into the product of the average plant size and the number of plants in the area and industry. We estimate the dynamics of both components simultaneously using French yearly data on 36 industries and 341 areas between 1984 and 1993. The careful specification of short-run dynamics and the control for fixed effects and endogeneity are shown to be critical in the empirical model. First, static externalities are prevalent compared to dynamic ones. Moreover, whereas area-and-industry effects explain most of the spatial variation of plant size, the local number of plants is mainly driven by the current local economic structure. Policies targeted towards plant creation should thus be more efficient. For instance, large areas endowed with a small number of even size industries have both more and larger plants. A large number of plants heterogeneous in size increases the average plant size, but the number of plants is higher when plants have similar size.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1061.

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Length: 32 pages
Date of creation: Mar 2004
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Handle: RePEc:iza:izadps:dp1061

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  9. Combes, Pierre-Philippe & Magnac, Thierry & Robin, Jean-Marc, 2003. "The Dynamics of Local Employment in France," CEPR Discussion Papers 3912, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Uwe Blien & Jens Suedekum & Katja Wolf, 2005. "Local Employment Growth in West Germany - A Dynamic Panel Approach," ERSA conference papers ersa05p620, European Regional Science Association. [Downloadable!]
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  2. Stefano Federico & Gaetano Alfredo Minerva, 2007. "Outward FDI and local employment growth in Italy," Temi di discussione (Economic working papers) 613, Bank of Italy, Economic Research Department. [Downloadable!]
    Other versions:
  3. Martin, Philippe & Mayer, Thierry & Mayneris, Florian, 2008. "Spatial Concentration and Firm-Level Productivity in France," CEPR Discussion Papers 6858, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  4. Gilles Duranton, 2007. "Urban Evolutions: The Fast, the Slow, and the Still," American Economic Review, American Economic Association, vol. 97(1), pages 197-221, March. [Downloadable!]
  5. Overman, Henry G. & Rice, Patricia & Venables, Anthony J., 2008. "Economic Linkages Across Space," CEPR Discussion Papers 6786, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  6. Brülhart, Marius & Mathys, Nicole Andréa, 2007. "Sectoral Agglomeration Economies in a Panel of European Regions," CEPR Discussion Papers 6410, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  7. Kimhi, Ayal, 2008. "Has Debt Restructuring Facilitatead Structural Transformation on Israeli Family Farms?," Discussion Papers 37943, Hebrew University of Jerusalem, Department of Agricultural Economics and Management. [Downloadable!]
    Other versions:
  8. Jens Suedekum, 2006. "Human Capital Externalities and Growth of High- and Low-Skilled Jobs," IZA Discussion Papers 1969, Institute for the Study of Labor (IZA). [Downloadable!]
  9. 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. [Downloadable!]
    Other versions:
  10. Raffaele Paci & Stefano Usai, 2006. "Agglomeration economies and growth-The case of Italian local labour systems, 1991-2001," Working Paper CRENoS 200612, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia. [Downloadable!]
  11. Stefano Federico & Gaetano Alfredo Minerva, 2005. "Fear of Relocation? Assessing the Impact of Italy’s FDI on Local Employment," Working Papers 102, SEMEQ Department - Faculty of Economics - University of Eastern Piedmont. [Downloadable!]
  12. Pierre-Philippe Combes & Thierry Magnac & Jean-Marc Robin, 2004. "The dynamics of local employment in France," Research Unit Working Papers 0402, Laboratoire d'Economie Appliquee, INRA. [Downloadable!]
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  13. Daniel F. Heuermann, 2009. "Reinventing the Skilled Region: Human Capital Externalities and Industrial Change," Discussion Papers 200902, Institute of Labour Law and Industrial Relations in the European Community (IAAEG). [Downloadable!]
  14. Blien, Uwe & Sanner, Helge, 2006. "Structural change and regional employment dynamics," IAB Discussion Paper 200606, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]. [Downloadable!]
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  15. Jens Suedekum, 2006. "Human Capital and Growth of High- and Low-Skilled Jobs in Cities," ERSA conference papers ersa06p69, European Regional Science Association. [Downloadable!]
  16. Otto Raspe & Frank van Oort, 2006. "The Knowledge Economy and Urban Economic Growth," Papers in Evolutionary Economic Geography (PEEG) 0607, Utrecht University, Section of Economic Geography, revised Apr 2006. [Downloadable!]
  17. Jens Suedekum & Uwe Blien, 2005. "Local Economic Structure and Industry Development in Germany, 1993-2001," Economics Bulletin, Economics Bulletin, vol. 15(17), pages 1-8. [Downloadable!]
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