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Agglomeration economies and clustering -- evidence from German and European firms

  • Kurt A. Hafner

This article empirically analyses the impact of agglomeration economies on the clustering of German and European firms using partial proportional-odds models. Firms are grouped according to industry and divided into departments. At the industry level, I find evidence for inter-industry economies derived from the New Economic Geography (NEG) framework for European firms in general and German knowledge-intensive firms in particular. At the department level, Marshallian Externalities such as the hiring of skilled labour and technological spillover, and therefore intra-industry economies , are empirically confirmed for European and German departments like Human Resources and R&D but rarely for others.

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Article provided by Taylor & Francis Journals in its journal Applied Economics.

Volume (Year): 45 (2013)
Issue (Month): 20 (July)
Pages: 2938-2953

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Handle: RePEc:taf:applec:v:45:y:2013:i:20:p:2938-2953
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  1. Dixit, Avinash K & Stiglitz, Joseph E, 1975. "Monopolistic Competition and Optimum Product Diversity," The Warwick Economics Research Paper Series (TWERPS) 64, University of Warwick, Department of Economics.
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  6. Fujita, Masahisa, 1988. "A monopolistic competition model of spatial agglomeration : Differentiated product approach," Regional Science and Urban Economics, Elsevier, vol. 18(1), pages 87-124, February.
  7. Randall W. Eberts & Daniel P. McMillen, 1999. "Agglomeration Economies and Urban Public Infrastructure," Book chapters authored by Upjohn Institute researchers, in: Paul Cheshire & Edwin S. Mills (ed.), handbook or Regional and Urban Economics, volume 3, pages 1455-1495 W.E. Upjohn Institute for Employment Research.
  8. Venables, Anthony J, 1993. "Equilibrium Locations of Vertically Linked Industries," CEPR Discussion Papers 802, C.E.P.R. Discussion Papers.
  9. Edward L. Glaeser & Giacomo A. M. Ponzetto, 2010. "Did the Death of Distance Hurt Detroit and Help New York?," NBER Chapters, in: Agglomeration Economics, pages 303-337 National Bureau of Economic Research, Inc.
  10. Fujita, Masahisa & Mori, Tomoya, 1996. "The role of ports in the making of major cities: Self-agglomeration and hub-effect," Journal of Development Economics, Elsevier, vol. 49(1), pages 93-120, April.
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  12. Spence, Michael, 1976. "Product Selection, Fixed Costs, and Monopolistic Competition," Review of Economic Studies, Wiley Blackwell, vol. 43(2), pages 217-35, June.
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