This paper estimates the nature and magnitude of the local externalities from own industry scale, as envisioned by Marshall. Census panel data on individual plants in high-tech and machinery industries across up to 487 countries are utilized, to quantify the direct effects of local external environment on plant productivity. Careful attention is paid to endogeneity issues in estimation. Magnitudes of scale externalities for corporate versus single plant firms are estimated and the sources of externalities (employment, numbers of plants, numbers of births, etc.) and extent (within the county versus extending to the rest of the MSA) are investigated. The paper asks in addition whether externalities are static or dynamic, a key issue in thinking about urban growth and industrial mobility; and whether they are dependent just on local own industry activity or also on overall local urban scale and/or diversity, a key issue in analyzing industrial composition and development of cities. The paper relates the findings on externalities for different industries to the extent of agglomeration and the degree of mobility of those industries across cities.
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
7358.
Length: Date of creation: Sep 1999 Date of revision: Handle: RePEc:nbr:nberwo:7358
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Find related papers by JEL classification: R00 - Urban, Rural, and Regional Economics - - General - - - General O30 - Economic Development, Technological Change, and Growth - - Technological Change - - - General
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Glaeser, Edward L & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1992.
"Growth in Cities,"
Journal of Political Economy,
University of Chicago Press, vol. 100(6), pages 1126-52, December.
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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.
[Downloadable!] (restricted)
Randy A. Becker & J. Vernon Henderson, 2001.
"Costs of Air Quality Regulation,"
NBER Chapters,
in: Behavioral and Distributional Effects of Environmental Policy, pages 159-186
National Bureau of Economic Research, Inc.
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