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Vertical disintegration in Marshallian industrial districts

  • Figueiredo, Octávio
  • Guimarães, Paulo
  • Woodward, Douglas

This paper uses a novel approach and detailed plant-level Portuguese data to reexamine the Marshallian hypothesis that specialization and the vertical disintegration of firms should be greater in areas where an industry concentrates. Our measure of firm specialization and vertical disintegration employs a Herfindhal index constructed with occupational shares for all workers within the firm. Controlling for firm size and sector of activity, we find that vertical disintegration is higher in areas where industries agglomerate. Sensitivity tests reveal that this positive relation is remarkably robust across different specifications.

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Article provided by Elsevier in its journal Regional Science and Urban Economics.

Volume (Year): 40 (2010)
Issue (Month): 1 (January)
Pages: 73-78

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Handle: RePEc:eee:regeco:v:40:y:2010:i:1:p:73-78
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  18. Paulo Guimar�es & Octávio Figueiredo & Douglas Woodward, 2007. "Measuring The Localization Of Economic Activity: A Parametric Approach," Journal of Regional Science, Wiley Blackwell, vol. 47(4), pages 753-774.
  19. Maddigan, Ruth J, 1981. "The Measurement of Vertical Integration," The Review of Economics and Statistics, MIT Press, vol. 63(3), pages 328-35, August.
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