The bright side of MAUP: Defining new measures of industrial agglomeration**I am grateful to Henry Overman for his effective guidance through all the steps of the project. I am also indebted for useful comments to Rodrigo Alegria, Alejandra Castrodad†Rodriguez, Paul Cheshire, Sabrina di Addario, Steve Gibbons, Ian Gordon, Daniel Graham, Andrea Lassmann, Stefano Magrini, Daniele Menon, Giordano Mion, Max Nathan, Roberto Picchizzolu, Rosa Sanchis†Guarner, four anonimous referees, and participants of the International Workshop in Economic Geography in Barcelona, KOF Research Seminars in Zurich, the ERSA Summer School in Bratislava, and the ERSA conference in Liverpool. The usual disclaimers apply

We present two new methodologies which exploit the ‘bright side’ of the modifiable areal unit problem. The first one produces an estimate of industrial agglomeration which significantly improves on existing indices; the second one provides a ranking of industries according to their responsiveness to labour market determinants of agglomeration. An empirical application based on US data shows that those industries which are highly dependent on the labour market in choosing their location are a mix of low and high skill sectors. Furthermore, we find that labour market determinants explain around one quarter of the variation of spatial agglomeration across industries.