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Geographic concentration and the temporal scope of agglomeration economies: An index decomposition

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  • Wren, Colin

Abstract

The paper decomposes a geographical concentration index between time-invariant and time varying location factors to examine the temporal scope of a spillover. This is the period of time over which one firm's activity directly affects the location of other activities in the same industry. An empirical methodology is proposed based on a frequency estimator approach. It is tested by numerical simulation and by application to data on the location of foreign-owned investment across British regions over 1985–05. Supposing that natural advantages are fixed, the paper finds that spillovers decay and have a temporal scope of about five years.

Suggested Citation

  • Wren, Colin, 2012. "Geographic concentration and the temporal scope of agglomeration economies: An index decomposition," Regional Science and Urban Economics, Elsevier, vol. 42(4), pages 681-690.
    • Handle: RePEc:eee:regeco:v:42:y:2012:i:4:p:681-690
    DOI: 10.1016/j.regsciurbeco.2012.03.004
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    References listed on IDEAS

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    22. Jones, Jonathan & Wren, Colin, 2011. "On the relative importance of agglomeration economies in the location of FDI across British regions," LSE Research Online Documents on Economics 58526, London School of Economics and Political Science, LSE Library.
    23. Wren, Colin & Jones, Jonathan, 2009. "Re-investment and the survival of foreign-owned plants," Regional Science and Urban Economics, Elsevier, vol. 39(2), pages 214-223, March.
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    Cited by:

    1. Colin Wren & Jonathan Jones, 2012. "FDI Location across British Regions and Agglomerative Forces: A Markov Analysis," Spatial Economic Analysis, Taylor & Francis Journals, vol. 7(2), pages 265-286, June.
    2. Jonathan Jones, 2017. "Agglomeration economies and the location of foreign direct investment: A meta-analysis," Journal of Regional Science, Wiley Blackwell, vol. 57(5), pages 731-757, November.
    3. Chenxi Li & Kening Wu & Xiangyu Gao, 2020. "Manufacturing industry agglomeration and spatial clustering: Evidence from Hebei Province, China," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 22(4), pages 2941-2965, April.
    4. Carlianne Patrick & Mark Partridge, 2022. "Agglomeration Spillovers and Persistence: New Evidence from Large Plant Openings," Working Papers 22-21, Center for Economic Studies, U.S. Census Bureau.

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    More about this item

    Keywords

    Industrial location; Agglomeration forces; Geographic concentration index; Spillovers; Temporal scope;
    All these keywords.

    JEL classification:

    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General

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