Localization Economies and Establishment Scale: A Dartboard Approach
AbstractThis paper reexamines the relationship between geographic concentration of an industry (localization) and establishment scale. We use an approach that builds on Ellison & Glaeser’s (1997) dartboard location model to measure localization. Contrary to Holmes & Stevens’s (2002) pioneering analysis based on employment location quotients, but in line with the predictions that follow from Alfred Marshall’s concept of localization economies, we find evidence that plants located in areas where an industry exhibits concentration in excess are smaller than plants in the same industry outside such areas.
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Bibliographic InfoPaper provided by Universidade do Porto, Faculdade de Economia do Porto in its series FEP Working Papers with number 247.
Length: 22 pages
Date of creation: Sep 2007
Date of revision:
dartboard location model; localization; establishment scale;
Find related papers by JEL classification:
- R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
- R39 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-10-27 (All new papers)
- NEP-GEO-2007-10-27 (Economic Geography)
- NEP-URE-2007-10-27 (Urban & Real Estate Economics)
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