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Spatial growth and industry age

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  • Desmet, Klaus
  • Rossi-Hansberg, Esteban

Abstract

Between 1970 and 2000 employment growth across U.S. counties exhibited very different patterns in manufacturing and services. Whereas manufacturing employment growth was negatively related to initial manufacturing employment across the entire distribution of counties, service employment growth was positively related to initial service employment for intermediate sized counties. This paper presents a theory to rationalize these facts. Local sectoral growth is driven by technological diffusion across space and depends on the age of the sector. The theory correctly predicts the relation between county employment growth and initial county employment in manufacturing at the turn of the 20th century.

Suggested Citation

  • Desmet, Klaus & Rossi-Hansberg, Esteban, 2009. "Spatial growth and industry age," Journal of Economic Theory, Elsevier, vol. 144(6), pages 2477-2502, November.
    • Handle: RePEc:eee:jetheo:v:144:y:2009:i:6:p:2477-2502
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    More about this item

    Keywords

    Spatial growth Industry age Technology diffusion Spillovers Distribution of economic activity Scale-dependent growth;

    JEL classification:

    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics

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