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Sectoral and Geographical Specificities in the Spatial Structure of Economic Activities

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Author Info

  • Giulio Bottazzi
  • Giovanni Dosi
  • Giorgio Fagiolo
  • Angelo Secchi

Abstract

This work explores the spatial structure of location of production activities. We try to disentangle location- from sector-specific drivers in the dynamic process of spatial agglomeration. We argue that the former typically apply "horizontally" (i.e. across all industrial sectors), while the latter unfold in the form of non-decreasing dynamic returns to the current stock of installed business units. A stochastic model of location is developed and three different specifications are tested against Italian data on the location of manufacturing firms. Our results suggest that different locations exert different structural influences on the distribution of production activities. Moreover, a widespread horizontal power of "urbanization", which makes particular locations more attractive irrespectively of the sector, does emerge. However, after controlling for the latter, one is still left with sector-specific forms of dynamic increasing returns to agglomeration, which vary a lot across different manufacturing activities.

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Bibliographic Info

Paper provided by Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy in its series LEM Papers Series with number 2004/21.

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Date of creation: 01 Nov 2004
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Handle: RePEc:ssa:lemwps:2004/21

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Keywords: Industrial Location; Agglomeration; Markov Chains; Dynamic Increasing Returns.;

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References

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  1. Maurel, Francoise & Sedillot, Beatrice, 1999. "A measure of the geographic concentration in french manufacturing industries," Regional Science and Urban Economics, Elsevier, vol. 29(5), pages 575-604, September.
  2. Guy Dumais & Glenn Ellison & Edward Glaeser, 1997. "Geographic Concentration as a Dynamic Process," NBER Working Papers 6270, National Bureau of Economic Research, Inc.
  3. Giulio Bottazzi & Angelo Secchi, 2007. "Repeated Choices under Dynamic Externalities," LEM Papers Series 2007/08, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
  4. Ottaviano, Gianmarco & Thisse, Jacques-Francois, 2004. "Agglomeration and economic geography," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 58, pages 2563-2608 Elsevier.
  5. Masahisa Fujita & Paul Krugman & Anthony J. Venables, 2001. "The Spatial Economy: Cities, Regions, and International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262561476, December.
  6. Dosi, Giovanni & Ermoliev, Yuri & Kaniovski, Yuri, 1994. "Generalized urn schemes and technological dynamics," Journal of Mathematical Economics, Elsevier, vol. 23(1), pages 1-19, January.
  7. Giulio Bottazzi & Giovanni Dosi & Giorgio Fagiolo & Angelo Secchi, 2007. "Modeling industrial evolution in geographical space," Journal of Economic Geography, Oxford University Press, vol. 7(5), pages 651-672, September.
  8. Edward L. Glaeser & Glenn Ellison, 1999. "The Geographic Concentration of Industry: Does Natural Advantage Explain Agglomeration?," American Economic Review, American Economic Association, vol. 89(2), pages 311-316, May.
  9. Devereux, Michael P. & Griffith, Rachel & Simpson, Helen, 2004. "The geographic distribution of production activity in the UK," Regional Science and Urban Economics, Elsevier, vol. 34(5), pages 533-564, September.
  10. T. Brenner, 2003. "An Identification of Local Industrial Clusters in Germany," Papers on Economics and Evolution 2003-04, Max Planck Institute of Economics, Evolutionary Economics Group.
  11. Pierre-Philippe Combes & Henry G. Overman, 2003. "The spatial distribution of economic activities in the European Union," LSE Research Online Documents on Economics 20023, London School of Economics and Political Science, LSE Library.
  12. Kirman, Alan, 1993. "Ants, Rationality, and Recruitment," The Quarterly Journal of Economics, MIT Press, vol. 108(1), pages 137-56, February.
  13. Koen Frenken & Ron A. Boschma, 2007. "A theoretical framework for Evolutionary Economic Geography: Industrial dynamics and urban growth as a branching process," Papers in Evolutionary Economic Geography (PEEG) 0701, Utrecht University, Section of Economic Geography, revised Mar 2007.
  14. Eric Bartelsman & Stefano Scarpetta & Fabiano Schivardi, 2003. "Comparative Analysis of Firm Demographics and Survival: Micro-Level Evidence for the OECD Countries," OECD Economics Department Working Papers 348, OECD Publishing.
  15. Thomas Brenner, 2006. "Identification of Local Industrial Clusters in Germany," Regional Studies, Taylor & Francis Journals, vol. 40(9), pages 991-1004.
  16. Rysman, Marc & Greenstein, Shane, 2005. "Testing for agglomeration and dispersion," Economics Letters, Elsevier, vol. 86(3), pages 405-411, March.
  17. Davis, Steven J. & Haltiwanger, John, 1999. "Gross job flows," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 41, pages 2711-2805 Elsevier.
  18. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June.
  19. Eric Bartelsman & Stefano Scarpetta & Fabiano Schivardi, 2005. "Comparative analysis of firm demographics and survival: evidence from micro-level sources in OECD countries," Industrial and Corporate Change, Oxford University Press, vol. 14(3), pages 365-391, June.
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Citations

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Cited by:
  1. Giulio Bottazzi & Pietro Dindo, 2008. "An evolutionary model of firms location with technological externalities," LEM Papers Series 2008/27, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
  2. Giulio Bottazzi & Giovanni Dosi & Giorgio Fagiolo & Angelo Secchi, 2007. "Modeling industrial evolution in geographical space," Journal of Economic Geography, Oxford University Press, vol. 7(5), pages 651-672, September.
  3. T. Brenner, 2006. "A Stochastic Theory of Geographic Concentration and the Empirical Evidence in Germany," Papers on Economics and Evolution 2005-23, Max Planck Institute of Economics, Evolutionary Economics Group.
  4. Vinko Mustra & Blanka Škrabić & Paško Burnać, 2011. "Spatial determinants of sectors wage inequaities: Analysis for the region of Croatia," ERSA conference papers ersa10p573, European Regional Science Association.
  5. E. Scalas & U. Garibaldi & S. Donadio, 2006. "Statistical equilibrium in simple exchange games I," The European Physical Journal B - Condensed Matter and Complex Systems, Springer, vol. 53(2), pages 267-272, 09.
  6. Matteo Barigozzi & Lucia Alessi & Marco Capasso & Giorgio Fagiolo, 2008. "The Distribution of Consumption-Expenditure Budget Shares. Evidence from Italian Households," LEM Papers Series 2008/18, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
  7. Barigozzi, Matteo & Alessi, Lucia & Capasso, Marco & Fagiolo, Giorgio, 2012. "The distribution of household consumption-expenditure budget shares," Structural Change and Economic Dynamics, Elsevier, vol. 23(1), pages 69-91.
  8. Matthias Duschl & Thomas Brenner, 2011. "Characteristics of Regional Industry-specific Employment Growth – Empirical Evidence for Germany," Working Papers on Innovation and Space 2011-07, Philipps University Marburg, Department of Geography.
  9. Thomas Brenner, 2006. "The Regional Industry-size Distribution - An Analysis of all Types of Industries in Germany," Papers on Economics and Evolution 2005-16, Max Planck Institute of Economics, Evolutionary Economics Group.

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