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Location Modelling and the Localization of Portuguese Manufacturing Industries

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Author Info
Paulo Guimarães ()
Octávio Figueiredo ()
Douglas Woodward

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Abstract

The recent index proposed in Ellison & Glaeser (1997) is now well established as the preferred method for measuring localization of economic activity. We critically review this index and build on the McFadden’s Random Utility (Profit) Maximization framework to develop an alternative measure that is more consistent with the theoretical construct underlying the original work of Ellison and Glaeser. Given that our method is regression based it goes beyond the descriptive nature of the EG index and allows us to evaluate how the localization measure behaves with changes in the systematic forces that drive firms’ location decisions. JEL classification: C25, R12, R39

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Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa04p28.

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Date of creation: Aug 2004
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Handle: RePEc:wiw:wiwrsa:ersa04p28

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Guimaraes, Paulo & Figueiredo, Octavio & Woodward, Douglas, 2000. "Agglomeration and the Location of Foreign Direct Investment in Portugal," Journal of Urban Economics, Elsevier, vol. 47(1), pages 115-135, January. [Downloadable!] (restricted)
  2. Figueiredo, Octavio & Guimaraes, Paulo & Woodward, Douglas, 2002. "Home-field advantage: location decisions of Portuguese entrepreneurs," Journal of Urban Economics, Elsevier, vol. 52(2), pages 341-361, September. [Downloadable!] (restricted)
  3. Head, Keith & Ries, John & Swenson, Deborah, 1995. "Agglomeration benefits and location choice: Evidence from Japanese manufacturing investments in the United States," Journal of International Economics, Elsevier, vol. 38(3-4), pages 223-247, May. [Downloadable!] (restricted)
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  4. Coughlin, Cletus C & Terza, Joseph V & Arromdee, Vachira, 1991. "State Characteristics and the Location of Foreign Direct Investment within the United States," The Review of Economics and Statistics, MIT Press, vol. 73(4), pages 675-83, November. [Downloadable!] (restricted)
  5. Paulo Guimarães & Octávio Figueirdo & Douglas Woodward, 2003. "A Tractable Approach to the Firm Location Decision Problem," The Review of Economics and Statistics, MIT Press, vol. 85(1), pages 201-204, 01. [Downloadable!] (restricted)
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  6. Guy Dumais & Glenn Ellison & Edward L. Glaeser, 2002. "Geographic Concentration As A Dynamic Process," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 193-204, May. [Downloadable!] (restricted)
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  7. 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.
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  8. Mata, Jose & Portugal, Pedro & Guimaraes, Paulo, 1995. "The survival of new plants: Start-up conditions and post-entry evolution," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 459-481, December. [Downloadable!] (restricted)
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  9. Duranton, Gilles & Henry G Overman, 2003. "Testing for Localisation Using Micro-Geographic Data," Royal Economic Society Annual Conference 2003 69, Royal Economic Society. [Downloadable!]
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  10. Cabral, Luís M B & Mata, José, 2001. "On the Evolution of the Firm Size Distribution: Facts and Theory," CEPR Discussion Papers 3045, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Jenifer Ruiz-Valenzuela & Rosina Moreno-Serrano & Esther Vaya-Valcarce, 2006. "Concentration of the Economic Activity: Comparing Methodologies and Geographic Units," ERSA conference papers ersa06p197, European Regional Science Association. [Downloadable!]
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