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Localization Economies and Establishment Scale: A Dartboard Approach

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Author Info

  • Octávio Figueiredo

    ()
    (Universidade do Porto and CEMPRE, Portugal)

  • Paulo Guimarães

    ()
    (University of South Carolina)

  • Douglas Woodward

    ()
    (University of South Carolina)

Abstract

This 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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File URL: http://www.fep.up.pt/investigacao/workingpapers/07.09.19_wp247_FigGuimWoodward.pdf
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Bibliographic Info

Paper provided by Universidade do Porto, Faculdade de Economia do Porto in its series FEP Working Papers with number 247.

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Length: 22 pages
Date of creation: Sep 2007
Date of revision:
Handle: RePEc:por:fepwps:247

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Keywords: dartboard location model; localization; establishment scale;

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  1. Ellison, Glenn & Glaeser, Edward L, 1997. "Geographic Concentration in U.S. Manufacturing Industries: A Dartboard Approach," Journal of Political Economy, University of Chicago Press, vol. 105(5), pages 889-927, October.
  2. Carlton, Dennis W, 1983. "The Location and Employment Choices of New Firms: An Econometric Model with Discrete and Continuous Endogenous Variables," The Review of Economics and Statistics, MIT Press, vol. 65(3), pages 440-49, August.
  3. Paulo Guimar�es & Octávio Figueiredo & Douglas Woodward, 2007. "Measuring The Localization Of Economic Activity: A Parametric Approach," Journal of Regional Science, Wiley Blackwell, vol. 47(4), pages 753-774.
  4. Ciccone, Antonio & Hall, Robert E, 1996. "Productivity and the Density of Economic Activity," American Economic Review, American Economic Association, vol. 86(1), pages 54-70, March.
  5. Ciccone, Antonio, 2002. "Agglomeration effects in Europe," European Economic Review, Elsevier, vol. 46(2), pages 213-227, February.
  6. Duranton, Gilles & Henry G Overman, 2003. "Testing for Localisation Using Micro-Geographic Data," Royal Economic Society Annual Conference 2003 69, Royal Economic Society.
  7. Bernard, Andrew B. & Bradford Jensen, J., 1999. "Exceptional exporter performance: cause, effect, or both?," Journal of International Economics, Elsevier, vol. 47(1), pages 1-25, February.
  8. Luís Cabral, 2007. "Small firms in Portugal: a selective survey of stylized facts, economic analysis, and policy implications," Portuguese Economic Journal, Springer, vol. 6(1), pages 65-88, April.
  9. Thomas J. Holmes & John J. Stevens, 2002. "Geographic Concentration and Establishment Scale," The Review of Economics and Statistics, MIT Press, vol. 84(4), pages 682-690, November.
  10. Salvador Barrios & Luisito Bertinelli & Eric Strobl, 2006. "Geographic Concentration And Establishment Scale: An Extension Using Panel Data," Journal of Regional Science, Wiley Blackwell, vol. 46(4), pages 733-746.
  11. Thomas J. Holmes & John J. Stevens, 2004. "Geographic concentration and establishment size: analysis in an alternative economic geography model," Journal of Economic Geography, Oxford University Press, vol. 4(3), pages 227-250, June.
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Cited by:
  1. Guimarães, Paulo & Figueiredo, Octávio & Woodward, Douglas, 2009. "Dartboard tests for the location quotient," Regional Science and Urban Economics, Elsevier, vol. 39(3), pages 360-364, May.
  2. Register, D. Lane & Lambert, Dayton M. & English, Burton C. & Jensen, Kimberly L. & Menard, R. Jamey & Wilcox, Michael D., 2012. "Geographic Distribution of Renewable Energy Sector Industries: An Analysis Using Recent Developments in Industry Concentration Measurement," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124038, Agricultural and Applied Economics Association.
  3. Strotebeck, Falk, 2010. "The Location Quotient – Assembly and application of methodological enhancements," MPRA Paper 47988, University Library of Munich, Germany.

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