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Agglomeration economies in the finnish manufacturing sector

  • Kirsi Mukkala
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    Regional concentration of population and economic activity is a common phenomenon both in Finland and the other most developed countries, which refers to the existence of agglomeration economies. Two types of economies are usually recognized to be important: specialization (Marshall externalities) and diversity (Jacobs externalities) economies. The former refer to the geographical concentration of a specific industry and the latter to the industrial diversity of the local system. This study examines the relationship between agglomeration economies and regional productivity in the manufacturing sector in Finland. A distinction is made between the effects of urbanization and localization economies. The production function method is applied to the manufacturing sub-sectors in the 83 NUTS 4-level regions in 1995 and 1999. The results support the regional specialization more than diversification even if some differences can be seen between the manufacturing sub-sectors.

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    File URL: http://www.tandfonline.com/doi/abs/10.1080/0003684042000287655
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    Article provided by Taylor & Francis Journals in its journal Applied Economics.

    Volume (Year): 36 (2004)
    Issue (Month): 21 ()
    Pages: 2419-2427

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    Handle: RePEc:taf:applec:v:36:y:2004:i:21:p:2419-2427
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    1. Munisamy Gopinath & Daniel Pick & Yonghai Li, 2004. "An empirical analysis of productivity growth and industrial concentration in us manufacturing," Applied Economics, Taylor & Francis Journals, vol. 36(1), pages 1-7.
    2. Glaeser, Edward Ludwig & Kallal, Hedi D. & Scheinkman, Jose A. & Shleifer, Andrei, 1992. "Growth in Cities," Scholarly Articles 3451309, Harvard University Department of Economics.
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    4. Vernon Henderson, 2001. "Marshall's Scale Economies," Working Papers 01-17, Center for Economic Studies, U.S. Census Bureau.
    5. Antonio Ciccone & Robert E. Hall, 1995. "Productivity and the density of economic activity," Economics Working Papers 120, Department of Economics and Business, Universitat Pompeu Fabra.
    6. Edward L. Glaeser & Glenn Ellison, 1999. "The Geographic Concentration of Industry: Does Natural Advantage Explain Agglomeration?," American Economic Review, American Economic Association, vol. 89(2), pages 311-316, May.
    7. Henderson, J. Vernon, 1991. "Urban Development: Theory, Fact, and Illusion," OUP Catalogue, Oxford University Press, number 9780195069020.
    8. McCoskey, Suzanne & Kao, Chihwa, 1999. " Testing the Stability of a Production Function with Urbanization as a Shift Factor," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(0), pages 671-90, Special I.
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