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Positive and Negative Agglomeration Externalities: Arbitration in the Pig Sector


  • Solène Larue
  • Jens Abildtrup
  • Bertrand Schmitt


Abstract In this study we analyse the determinants of pig production location in Denmark with a particular focus on positive and negative agglomeration externalities. Based on the theory of agglomeration and a discussion of the organization of the Danish pig production sector, a model of pig production is developed and tested empirically, applying the FG2SLS approach. Our results show that technical and pecuniary externalities have a positive effect on location, while the impact of environmental regulations is ambiguous. Indeed, the results show that urbanization economies are more important than the negative impact of land competition at the local level, but that neighbouring land competition implied by environmental regulations seems to have a negative effect on location. Externalités d'agglomérations positives et négatives: arbitrage dans le secteur de la production porcine Résumé Dans la présente étude, nous analysons les déterminants de la localisation de la production porcine au Danemark, en insistant tout particulièrement sur les externalités d'agglomération positives et négatives. Nous créons un modèle pour la production porcine, sur la base de la théorie de l'agglomération et de discussions sur l'organisation du secteur de la production porcine au Danemark, et nous le testons de façon empirique, en appliquant la méthode FG2SLS. Nos résultats indiquent que les externalités techniques et pécuniaires ont un effet positif sur la localisation , alors que l'impact des rėglementations environnementales est ambigu. Externalidades de la aglomeración positiva y negativa: arbitraje en el sector porcino Extracto En este estudio analizamos los determinantes de la ubicación de la producción de cerdos en Dinamarca con un enfoque particular en las externalidades de la aglomeración positiva y negativa. Basado en la teoría de la aglomeración y en una discusión sobre la organización del sector de la producción de cerdos danesa, se desarrolla y ensaya empíricamente un modelo de producción de cerdos, aplicando el planteamiento FG2SLS. Nuestros resultados muestran que las externalidades técnicas y pecuniarias tienen un efecto positivo sobre la ubicación, mientras que el impacto de las normativas medioambientales es ambiguo.

Suggested Citation

  • Solène Larue & Jens Abildtrup & Bertrand Schmitt, 2011. "Positive and Negative Agglomeration Externalities: Arbitration in the Pig Sector," Spatial Economic Analysis, Taylor & Francis Journals, vol. 6(2), pages 167-183.
  • Handle: RePEc:taf:specan:v:6:y:2011:i:2:p:167-183
    DOI: 10.1080/17421772.2011.557773

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    References listed on IDEAS

    1. Schrader, Lee F. & Boehlje, Michael, 1996. "Cooperative Coordination In The Hog-Pork System: Examples From Europe And The U.S," Staff Papers 28611, Purdue University, Department of Agricultural Economics.
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    Cited by:

    1. Laroche Dupraz, C. & Postolle, A., 2013. "Food sovereignty and agricultural trade policy commitments: How much leeway do West African nations have?," Food Policy, Elsevier, vol. 38(C), pages 115-125.
    2. Abildtrup, Jens & Garcia, Serge & Stenger, Anne, 2013. "The effect of forest land use on the cost of drinking water supply: A spatial econometric analysis," Ecological Economics, Elsevier, vol. 92(C), pages 126-136.
    3. Schmidtner, Eva & Lippert, Christian & Dabbert, Stephan, 2015. "Does Spatial Dependence Depend on Spatial Resolution? – An Empirical Analysis of Organic Farming in Southern Germany," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 64(03), September.
    4. Fertő, Imre & Csonka, Arnold, 2017. "Válság- és agglomerációs hatások a magyarországi sertéstartásban [Crisis and agglomeration in Hungary s pig production]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(2), pages 105-122.
    5. Csonka, Arnold & Fertő, Imre, 2017. "Does Crisis Have Impact on the Agglomeration in the Hungarian Pork Sector?," 2017 International Congress, August 28-September 1, 2017, Parma, Italy 261418, European Association of Agricultural Economists.
    6. Carl Gaigné & Julie Le Gallo & Solène Larue & Bertrand Schmitt, 2012. "Does Regulation of Manure Land Application Work Against Agglomeration Economies? Theory and Evidence from the French Hog Sector," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(1), pages 116-132.
    7. Abay Mulatu & Ada Wossink, 2014. "Environmental Regulation and Location of Industrialized Agricultural Production in Europe," Land Economics, University of Wisconsin Press, vol. 90(3), pages 509-537.
    8. B. Fingleton & P. Cheshire & H. Garretsen & D. Igliori & J. Le Gallo & P. McCann & J. McCombie & V. Monastiriotis & B. Moore & M. Roberts, 2011. "We Move into Distinguished Company," Spatial Economic Analysis, Taylor & Francis Journals, vol. 6(2), pages 133-138.
    9. Abay Mulatu & Ada Wossink, 2012. "Environmental regulation and location of industrialised agricultural production in Europe," The School of Economics Discussion Paper Series 1215, Economics, The University of Manchester.
    10. Csonka, Arnold & Fertő, Imre, 2016. "Crisis and Agglomeration in the Hungarian Hog Sector," 149th Seminar, October 27-28, 2016, Rennes, France 244787, European Association of Agricultural Economists.

    More about this item


    Agglomeration externalities; spatial econometrics; environmental regulations; C13; R30; R15; Q11;

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices


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