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Increasing Returns and the Spatial Structure of French Wages


  • Sylvain Barde


Abstract New Economic Geography presents increasing returns to agglomeration as a central explanation for concentration of economic activity. The estimation of the size of these effects remains, however, a standing issue in the field. The focus of this study is to investigate the presence of increasing returns to agglomeration in the spatial structure of wages in France, using the methodology developed by Fingleton and initially used in the UK. The central finding is the statistically significant presence of such returns to density for France, as was the case for the UK in the original study. Compared to Fingleton's original work, it is shown that returns to density play a larger role in explaining French labour productivity, while commuting plays a smaller role than in the UK. Rendements croissants et structure spatiale des salaires français RÉSUMÉ La nouvelle économie géographique présente les ‘rendements croissants d'agglomération’ comme une variable explicative privilégiée de la concentration spatiale de l'activité économique. Un des enjeux empiriques de la nouvelle économie géographique reste cependant l'estimation de leur taille. Dans cette étude, nous cherchons à évaluer la présence de tels rendements croissants d'agglomération dans la structure spatiale des salaires français, en utilisant la méthodologie d'estimation développée pour le Royaume-Uni par Fingleton. Le résultat central de notre étude est la présence statistiquement significative de rendements croissants d'agglomération sur les zones d'emploi françaises, du même ordre de grandeur que ceux qui avaient été établis pour le Royaume-Uni dans l’étude originale. De plus, par rapport à l'analyse originale de Fingleton, nous montrons que les retours à la densité sont plus déterminants dans l'explication de la productivité du travail en France, tandis que les déplacements domicile—travail y jouent un rôle moins important qu'au Royaume-Uni. Rendimientos crecientes y la estructura espacial de los sueldos franceses RÉSUMÉN La nueva geografía económica presenta los rendimientos crecientes de aglomeración como una explicación central para la concentración de actividad económica. No obstante, la estimación de la magnitud de estos efectos continúa siendo una cuestión pendiente en el campo. El enfoque de este estudio es investigar la presencia de rendimientos crecientes de aglomeración en la estructura espacial de los sueldos en Francia, utilizando la metodología desarrollada por Fingleton y empleada inicialmente en el Reino Unido. El hallazgo central es la presencia estadísticamente significativa de tales rendimientos de densidad en Francia, como fue el caso del Reino Unido en el estudio original. En comparación con el trabajo original de Fingleton, se muestra que los rendimientos de densidad desempeñan un papel más importante en explicar la productividad laboral francesa, mientras que viajar largas distancias al trabajo diariamente tiene una función menor que en el Reino Unido.

Suggested Citation

  • Sylvain Barde, 2010. "Increasing Returns and the Spatial Structure of French Wages," Spatial Economic Analysis, Taylor & Francis Journals, vol. 5(1), pages 73-91.
  • Handle: RePEc:taf:specan:v:5:y:2010:i:1:p:73-91 DOI: 10.1080/17421770903511338

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    References listed on IDEAS

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    Cited by:

    1. Luisa Corrado & Bernard Fingleton, 2012. "Where Is The Economics In Spatial Econometrics?," Journal of Regional Science, Wiley Blackwell, vol. 52(2), pages 210-239, May.
    2. Gabriel Ahlfeldt & Elisabetta Pietrostefani, 2017. "The Economic Effects of Density: A Synthesis," CESifo Working Paper Series 6744, CESifo Group Munich.
    3. Elliott, Robert J.R. & Zhou, Ying, 2015. "Co-location and Spatial Wage Spillovers in China: The Role of Foreign Ownership and Trade," World Development, Elsevier, vol. 66(C), pages 629-644.
    4. Gabriel M. Ahfeldt & Elisabetta Pietrostefani, 2017. "The Compact City in Empirical Research: A Quantitative Literature Review," SERC Discussion Papers 0215, Spatial Economics Research Centre, LSE.
    5. Ahfeldt, Gabriel M. & Pietrostefani, Elisabetta, 2017. "The compact city in empirical research: A quantitative literature review," LSE Research Online Documents on Economics 83638, London School of Economics and Political Science, LSE Library.
    6. Flora Bellone & Patrick Musso & Lionel Nesta & Frederic Warzynski, 2016. "International trade and firm-level markups when location and quality matter," Journal of Economic Geography, Oxford University Press, vol. 16(1), pages 67-91.
    7. Fichet de Clairfontaine, Aurélien & Hammer, Christoph, 2016. "Trade Costs and Income in European Regions: Evidence from a regional bilateral trade dataset," Department of Economics Working Paper Series 4887, WU Vienna University of Economics and Business.
    8. Gabriel M. Ahlfeldt & Elisabetta Pietrostefani, 2017. "The Economic Effects of Density: A Synthesis," SERC Discussion Papers 0210, Spatial Economics Research Centre, LSE.
    9. Bernard FINGLETON & Silvia PALOMBI, 2013. "The Wage Curve Reconsidered: Is It Truly An 'Empirical Law Of Economics'?," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 38, pages 49-92.
    10. Ahlfeldt, Gabriel M. & Pietrostefani, Elisabetta, 2017. "The economic effects of density: A synthesis," LSE Research Online Documents on Economics 83628, London School of Economics and Political Science, LSE Library.

    More about this item


    Spatial econometrics; increasing returns; spatial autoregressive model; C21; R12; R23;

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population


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