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Agglomeration effects on labor productivity: An assessment with microdata

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  • Stephan Brunow

    (IAB)

  • Uwe Blien

    (IAB)

Abstract

Urbanization and localization effects are known to boost the regional economy and its growth potential. The emergence of these effects is due to localized knowledge flows, the closeness to markets, but also due to the diversity of services and industries. All these effects have the potential to increase the productivity (and profitability) of firms. Whereas many studies have been conducted at the industry or the regional level, this paper adds to the existing literature by starting at the level of establishments and taking the interaction with the surrounding regions into account. This is possible by exploiting an exceptionally large establishment panel study and the employment statistics for Germany. The empirical analyses are carried out in two steps regressions in order to separate the characteristics of establishments from regional influences.

Suggested Citation

  • Stephan Brunow & Uwe Blien, 2014. "Agglomeration effects on labor productivity: An assessment with microdata," Norface Discussion Paper Series 2014006, Norface Research Programme on Migration, Department of Economics, University College London.
    • Handle: RePEc:nor:wpaper:2014006
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    Cited by:

    1. Brunow, Stephan & Hammer, Andrea & McCann, Philip, 2017. "Innovation and location in German knowledge intensive business service firms," IAB-Discussion Paper 201722, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    2. Björn Döhring & Atanas Hristov & Christoph Maier & Werner Roeger & Anna Thum-Thysen, 2021. "COVID-19 acceleration in digitalisation, aggregate productivity growth and the functional income distribution," International Economics and Economic Policy, Springer, vol. 18(3), pages 571-604, July.
    3. Marusca De Castris & Guido Pellegrini, 2015. "Agglomeration Effects On Regional Unemployment In Europe," Working Papers 0715, CREI Università degli Studi Roma Tre, revised 2015.
    4. Stuart Donovan & Thomas de Graaff & Henri L. F. de Groot & Carl C. Koopmans, 2024. "Unraveling urban advantages—A meta‐analysis of agglomeration economies," Journal of Economic Surveys, Wiley Blackwell, vol. 38(1), pages 168-200, February.
    5. Hundt, Christian & Holtermann, Linus & Steeger, Jonas & Bersch, Johannes, 2019. "Cluster externalities, firm capabilities, and the recessionary shock: How the macro-to-micro-transition shapes firm performance during stable times and times of crisis," ZEW Discussion Papers 19-008, ZEW - Leibniz Centre for European Economic Research.
    6. Hundt, Christian & Holtermann, Linus & Steeger, Jonas & Bersch, Johannes, 2019. "Cluster externalities, firm capabilities, and the recessionary shock: How the macro-to-micro-transition shapes firm performance during stable times and times of crisis," MPRA Paper 91802, University Library of Munich, Germany.
    7. Blien Uwe & Möller Joachim & Hong Van Phan thi & Brunow Stephan, 2016. "Long-Lasting Labour Market Consequences of German Unification," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 236(2), pages 181-216, March.
    8. Devesh Singh, 2022. "Cluster Space Among Labor Productivity, Urbanization, and Agglomeration of Industries in Hungary," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 13(2), pages 1008-1027, June.
    9. Andrey Pushkarev & Oleg Mariev & Natalia Davidson, 2020. "The effect of spatial concentration on the business performance in various types of Russian cities," Proceedings of Economics and Finance Conferences 10913084, International Institute of Social and Economic Sciences.

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    Keywords

    Region; labor productivity; agglomeration effects; MAR-; Jacobs-effects;
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