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Is there a limit to agglomeration? Evidence from productivity of Dutch firms

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  • Marian Rizov

Abstract

We compute aggregate productivity of three categories of regions, classified by level of urbanization in the Netherlands, from firm-specific total factor productivity (TFP) measures. TFP measures are estimated by a semi-parametric algorithm, within 2-digit industries, covering agriculture, manufacturing, construction, trade and services, using AMADEUS data over the period 1997-2006. We analyse the productivity differentials across urbanization categories by decomposing them into industry productivity effect and industry composition effect. Our analysis indicates that there is non-linear, inverted U-shape effect of agglomeration on productivity growth but in levels agglomeration is associated with higher productivity.

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  • Marian Rizov, 2011. "Is there a limit to agglomeration? Evidence from productivity of Dutch firms," ERSA conference papers ersa11p231, European Regional Science Association.
    • Handle: RePEc:wiw:wiwrsa:ersa11p231
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    4. Annus Azhar & Shahid Adil, 2019. "The Effects of Agglomeration on Socio-economic Outcomes: A District Level Panel Study of Punjab," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 58(2), pages 159-176.
    5. Lucas Figal Garone & Alessandro Maffioli & Joao Negri & Cesar Rodriguez & Gonzalo Vázquez-Baré, 2015. "Cluster development policy, SME’s performance, and spillovers: evidence from Brazil," Small Business Economics, Springer, vol. 44(4), pages 925-948, April.
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    7. Jean Dubé & Cédric Brunelle, 2014. "Dots to dots: a general methodology to build local indicators using spatial micro-data," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 53(1), pages 245-272, August.
    8. Ping Lu & Jianhui Liu & Yunxuan Wang & Lei Ruan, 2021. "Can industrial agglomeration improve regional green total factor productivity in China? An empirical analysis based on spatial econometrics," Growth and Change, Wiley Blackwell, vol. 52(2), pages 1011-1039, June.
    9. Sugam Agarwal & Smruti Ranjan Behera, 2022. "Geographical concentration of knowledge and technology-intensive industries in India: empirical evidence from establishment-level analysis," Indian Economic Review, Springer, vol. 57(2), pages 513-552, December.
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    11. Wei, Wei & Zhang, Wan-Li & Wen, Jun & Wang, Jun-Sheng, 2020. "TFP growth in Chinese cities: The role of factor-intensity and industrial agglomeration," Economic Modelling, Elsevier, vol. 91(C), pages 534-549.
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    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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