Agglomeration Elasticities in New Zealand
AbstractThis paper analyses the relationship between firms’ multi-factor productivity and the effective employment density of the areas where they operate. Quantifying these agglomeration elasticities is of central importance in the evaluation of the wider economic benefits of transport investments. We estimate agglomeration elasticities using the Statistics New Zealand prototype Longitudinal Business Database: a firm-level panel covering the period 1999 to 2006. We estimate that an area with 10 percent higher effective density has firms with productivity that is 0.69 percent higher, once we control for the industry specific production functions and sorting of more productive firms across industries and locations. We present separate estimates of agglomeration elasticities for specific industries and regions, and examine the interaction of agglomeration with capital, labour, and other inputs.
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Bibliographic InfoPaper provided by Motu Economic and Public Policy Research in its series Working Papers with number 09_06.
Length: 43 pages
Date of creation: Jun 2009
Date of revision:
Agglomeration; urban density; transport evaluation; productivity;
Find related papers by JEL classification:
- L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
- R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
- R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location
- R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-07-17 (All new papers)
- NEP-GEO-2009-07-17 (Economic Geography)
- NEP-URE-2009-07-17 (Urban & Real Estate Economics)
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