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Influence of district external economies on firm Productivity: a multilevel approach


  • Ruiz Fuensanta , María Jesús

    () (Universidad de Castilla-La Mancha)


The aim of this paper is to empirically investigate the factors affecting the productivity of firms located in industrial districts. With this purpose, individual firm characteristics and the three classic Marshallian sources of external economies are combined within the framework of a Cobb-Douglas production function which is estimated using a sample of 1.968 manufacturing firms located in 45 industrial districts to be found in the Spanish region of Castilla-La Mancha. The methodology used in the estimation is the multilevel analysis which is especially appropriate for the analysis of hierarchical data structures. The results show that district external economies explain a large amount of the between-districts variation in labour productivity.

Suggested Citation

  • Ruiz Fuensanta , María Jesús, 2010. "Influence of district external economies on firm Productivity: a multilevel approach," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 18, pages 61-82.
  • Handle: RePEc:ris:invreg:0062

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    References listed on IDEAS

    1. Persson, Torsten & Tabellini, Guido, 1992. "Growth, distribution and politics," European Economic Review, Elsevier, vol. 36(2-3), pages 593-602, April.
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    5. François Bourguignon & Francisco H. G. Ferreira & Marta Menéndez, 2007. "Inequality Of Opportunity In Brazil," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 53(4), pages 585-618, December.
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    7. Roberto Ezcurra, 2009. "Does Income Polarization Affect Economic Growth? The Case of the European Regions," Regional Studies, Taylor & Francis Journals, vol. 43(2), pages 267-285.
    8. Stiglitz, Joseph E, 1969. "Distribution of Income and Wealth among Individuals," Econometrica, Econometric Society, vol. 37(3), pages 382-397, July.
    9. Banerjee, Abhijit V & Duflo, Esther, 2003. "Inequality and Growth: What Can the Data Say?," Journal of Economic Growth, Springer, vol. 8(3), pages 267-299, September.
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    More about this item


    productivity; external economies; Marshallian industrial districts; hierarchical linear analysis;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General


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