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Spatial Localization in Manufacturing: A Cross-Country Analysis

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  • Stefania Vitali
  • Mauro Napoletano
  • Giorgio Fagiolo

Abstract

This paper employs a homogenous firms database to investigate industry localization in European countries. More specifically, we compare, across industries and countries, the predictions of two of the most popular localization indices, i.e., the Ellison and Glaeser (1997) index and the Duranton and Overman (2005) index. We find that, independently from the index used, localization is a pervasive phenomenon in all countries studied, but the degree of localization is very uneven across industries in each country. Furthermore, we find that the two indices significantly diverge in predicting the intensity of the forces generating localization within each industry. Finally, we perform a cross-sectoral analysis of localized industries. We show that, in all countries, localized sectors are mainly ``traditional'' sectors (like jewelery, wine, and textiles) and sectors where scale economies are important. However, once one controls for countries' industrial structures science-based sectors turn out to be the most localized ones.

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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 2009/04.

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Date of creation: 30 Mar 2009
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Handle: RePEc:ssa:lemwps:2009/04

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Keywords: Industry Localization; Manufacturing Industries; Localization Indices; Spatial Concentration; Spatial correlation; Cross-country studies;

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References

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  1. Guy Dumais & Glenn Ellison & Edward Glaeser, 1997. "Geographic Concentration as a Dynamic Process," NBER Working Papers 6270, National Bureau of Economic Research, Inc.
  2. Thomas Brenner, 2006. "Identification of Local Industrial Clusters in Germany," Regional Studies, Taylor & Francis Journals, vol. 40(9), pages 991-1004.
  3. Lafourcade, Miren & Mion, Giordano, 2007. "Concentration, agglomeration and the size of plants," Regional Science and Urban Economics, Elsevier, vol. 37(1), pages 46-68, January.
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  7. Devereux, Michael P & Griffith, Rachel & Simpson, Helen, 2002. "The Geographical Distribution of Production Activity in the UK," CEPR Discussion Papers 3627, C.E.P.R. Discussion Papers.
  8. Strauss-Kahn, Vanessa & Vives, Xavier, 2006. "Why and where do headquarters move?," IESE Research Papers D/650, IESE Business School.
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  12. 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.
  13. Ellison, G. & Glaeser, E.L., 1994. "Geographic Concentration in U.S. Manufacturing Industries: A Dartboard Approach," Working papers 94-27, Massachusetts Institute of Technology (MIT), Department of Economics.
  14. 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.
  15. Barrios, Salvador & Bertinelli, Luisito & Strobl, Eric & Teixeira, Antonio Carlos, 2004. "The dynamics of Agglomeration: Evidence from Ireland and Portugal," MPRA Paper 5706, University Library of Munich, Germany.
  16. Haaland, Jan I. & Kind, Hans Jarle & Ulltveit-Moe, Karen-Helene, 1999. "What Determines the Economic Geography of Europe?," CEPR Discussion Papers 2072, C.E.P.R. Discussion Papers.
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  18. Rosenthal, Stuart S. & Strange, William C., 2001. "The Determinants of Agglomeration," Journal of Urban Economics, Elsevier, vol. 50(2), pages 191-229, September.
  19. Luisito Bertinelli & Jehan Decrop, 2005. "Geographical agglomeration: Ellison and Glaeser's index applied to the case of Belgian manufacturing industry," Regional Studies, Taylor & Francis Journals, vol. 39(5), pages 567-583.
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Cited by:
  1. Tobias Scholl & Thomas Brenner, 2013. "Optimizing Distance-Based Methods for Big Data Analysis," Working Papers on Innovation and Space 2013-09, Philipps University Marburg, Department of Geography.
  2. Tobias Scholl & Thomas Brenner, 2013. "Detecting Spatial Clustering Using a Firm-Level Index," Working Papers on Innovation and Space 2012-02, Philipps University Marburg, Department of Geography.
  3. Tobias Scholl & Thomas Brenner, 2011. "Testing for Clustering of Industries - Evidence from micro geographic data," Working Papers on Innovation and Space 2011-02, Philipps University Marburg, Department of Geography.

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