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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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    More about this item

    Keywords

    Industrial location; Agglomeration forces; Geographic concentration index; Spillovers; Temporal scope;

    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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