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Agglomeration externalities and productivity growth: US cities, 1880–1930

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  • Alexander Klein
  • Nicholas Crafts

Abstract

We investigate the role of industrial structure in labour productivity growth in manufacturing in US cities during the ‘second industrial revolution’. We find that initially greater specialization was associated with faster subsequent productivity growth but that only the very high levels of diversity which obtained in some very large cities had a positive correlation. We interpret our results as demonstrating the existence of dynamic Marshallian externalities. The impact of industrial specialization in our sample of US cities after 1890 is found to have raised the level of labour productivity in manufacturing by about 4 per cent by 1920.

Suggested Citation

  • Alexander Klein & Nicholas Crafts, 2020. "Agglomeration externalities and productivity growth: US cities, 1880–1930," Economic History Review, Economic History Society, vol. 73(1), pages 209-232, February.
    • Handle: RePEc:bla:ehsrev:v:73:y:2020:i:1:p:209-232
    DOI: 10.1111/ehr.12786
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    Cited by:

    1. Klein, Alexander & Crafts, Nicholas, 2023. "Unconditional Convergence in Manufacturing Productivity across U.S. States: What the Long-Run Data Show," CEPR Discussion Papers 18065, C.E.P.R. Discussion Papers.
    2. Shulin Wan & Weixin Luan & Qiaoqiao Lin, 2021. "Industry linkage, spatial correlation, and city exports: case study of the textile and clothing export industry in China," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 66(1), pages 91-112, February.
    3. Hanlon, W.Walker & Heblich, Stephan, 2022. "History and urban economics," Regional Science and Urban Economics, Elsevier, vol. 94(C).
    4. Steijn, Mathieu P.A. & Koster, Hans R.A. & Van Oort, Frank G., 2022. "The dynamics of industry agglomeration: Evidence from 44 years of coagglomeration patterns," Journal of Urban Economics, Elsevier, vol. 130(C).
    5. Hoang, Manh Cuong & Schiller, Daniel, 2023. "Which firms benefit the most from agglomeration? New evidence from an emerging country with consistent measure of productivity," Journal of Asian Economics, Elsevier, vol. 86(C).
    6. Hangang Hu & Lisha Pan & Xin Jing & Guan Li & Yuefei Zhuo & Zhongguo Xu & Yang Chen & Xueqi Wang, 2022. "The Spatiotemporal Non-Stationary Effect of Industrial Agglomeration on Urban Land Use Efficiency: A Case Study of Yangtze River Delta, China," Land, MDPI, vol. 11(5), pages 1-27, May.

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