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Identifying urbanisation and localisation externalities in manufacturing and service industries

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  • Daniel J Graham

Abstract

This article estimates urbanisation and localisation economies for two digit manufacturing and service industries. The analysis is based on estimation of a translog production-inverse input demand system using data on British firms. We use distance-based measures of localisation to test for the spatial transmission of externalities. We identify positive localisation economies for 13 of the 27 sectors examined. The results indicate that where localisation economies exist, they tend to attenuate fairly rapidly with distance. All localisation externalities are identified within a 10 kilometre radius of the firm. Positive elasticities of productivity with respect to urbanisation are identified for 14 sectors. The weighted average localisation elasticity for manufacturing industries is 0.03 and for services 0.01. The mean urbanisation elasticities are 0.07 and 0.19 respectively. Copyright (c) 2008 the author(s). Journal compilation (c) 2008 RSAI.

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  • Daniel J Graham, 2009. "Identifying urbanisation and localisation externalities in manufacturing and service industries," Papers in Regional Science, Wiley Blackwell, vol. 88(1), pages 63-84, March.
  • Handle: RePEc:bla:presci:v:88:y:2009:i:1:p:63-84
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    9. Frick, Susanne A. & Rodríguez-Pose, Andrés, 2018. "Change in urban concentration and economic growth," CEPR Discussion Papers 12566, C.E.P.R. Discussion Papers.
    10. Susanne A. Frick & Andres Rodriguez-Pose, 2017. "Big or small cities? On city size and economic growth," Papers in Evolutionary Economic Geography (PEEG) 1725, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Sep 2017.
    11. Dean Hanink & Robert Cromley & Avraham Ebenstein, 2012. "Wage-based evidence of returns to external scale in China’s manufacturing: a spatial analysis," The Annals of Regional Science, Springer;Western Regional Science Association, pages 1-16.
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    15. Matthias Duschl & Tobias Scholl & Thomas Brenner & Dennis Luxen & Falk Raschke, 2015. "Industry-Specific Firm Growth and Agglomeration," Regional Studies, Taylor & Francis Journals, pages 1822-1839.
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    21. Laird, James J. & Mackie, Peter J., 2014. "Wider economic benefits of transport schemes in remote rural areas," Research in Transportation Economics, Elsevier, vol. 47(C), pages 92-102.
    22. Morgenroth, Edgar, 2014. "The Regional Development Impacts of Transport Infrastructure: A Literature Review and Policy Implications," Research Series, Economic and Social Research Institute (ESRI), number BKMNEXT278.
    23. Tanaka, Kiyoyasu & Hashiguchi, Yoshihiro, 2017. "Agglomeration economies in the formal and informal sectors : a Bayesian spatial approach," IDE Discussion Papers 666, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    24. Matthias Duschl & Tobias Scholl & Thomas Brenner & Dennis Luxen & Falk Raschke, 2015. "Industry-Specific Firm Growth and Agglomeration," Regional Studies, Taylor & Francis Journals, pages 1822-1839.

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