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Regional industrial structure and agglomeration economies: An analysis of productivity in three manufacturing industries

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  • Drucker, Joshua
  • Feser, Edward
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    Abstract

    We investigate whether a more concentrated regional industrial structure – the dominance of a few large firms in a given industry in a region – limits agglomeration economies and ultimately diminishes the economic performance of firms in that industry, especially small ones. In an application to three industries using establishment-level production functions and a combination of confidential and publicly available data sources, we find a consistently negative and substantial direct productivity effect associated with regional industrial structure concentration and only mixed and relatively weak evidence that agglomeration economies are a mediating factor in that effect.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0166046211000573
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    Article provided by Elsevier in its journal Regional Science and Urban Economics.

    Volume (Year): 42 (2012)
    Issue (Month): 1-2 ()
    Pages: 1-14

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    Handle: RePEc:eee:regeco:v:42:y:2012:i:1:p:1-14
    Contact details of provider: Web page: http://www.elsevier.com/locate/regec

    Keywords: Industrial structure; Agglomeration economies; Manufacturing; Productivity; Small firms;

    Find related papers by JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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    Cited by:

    1. Pierre-Philippe Combes & Laurent Gobillon, 2014. "The Empirics of Agglomeration Economies," PSE Working Papers halshs-01071761, HAL.
    2. Matthias Duschl & Tobias Scholl & Thomas Brenner & Dennis Luxen & Falk Raschke, 2013. "Industry-specific firm growth and agglomeration," ERSA conference papers ersa13p134, European Regional Science Association.
    3. Park, Jooyoun & Reynolds, C.L. & Rohlin, Shawn M., 2014. "The impact of import-related displacement on local business activity," Regional Science and Urban Economics, Elsevier, vol. 48(C), pages 94-109.
    4. Hervas Oliver,Jose Luis & Gonzalez,Gregorio & Caja,Pedro, 2014. "Clusters and industrial districts: where is the literature going? Identifying emerging sub-fields of research," INGENIO (CSIC-UPV) Working Paper Series 201409, INGENIO (CSIC-UPV).
    5. Stephan Brunow & Uwe Blien, 2014. "Agglomeration effects on labor productivity: An assessment with microdata," Norface Discussion Paper Series 2014006, Norface Research Programme on Migration, Department of Economics, University College London.
    6. Gabriel, Stuart A. & Rosenthal, Stuart S., 2013. "Urbanization, agglomeration economies, and access to mortgage credit," Regional Science and Urban Economics, Elsevier, vol. 43(1), pages 42-50.
    7. Matthias Duschl & Antje Schimke & Thomas Brenner & Dennis Luxen, 2014. "Firm Growth and the Spatial Impact of Geolocated External Factors," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 234(2-3), pages 234-256, April.
    8. Han, Feng & Ke, Shanzi, 2016. "The effects of factor proximity and market potential on urban manufacturing output," China Economic Review, Elsevier, vol. 39(C), pages 31-45.

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