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Selection and Agglomeration Impact on Firm's Productivity: A Study of Taiwan's Manufacturing Sector

Author

Listed:
  • Hasan, Syed M.
  • Klaiber, H. Allen
  • Sheldon, Ian

Abstract

This paper studies the impact of agglomeration and selection on firms' total factor productivity (TFP) distributions depending on their spatial location, specifically in science parks and large cities in Taiwan. The TFP distributions indicate a mean-shift and greater dispersion whenever firms benefit from agglomeration economies. However, selection due to competition may cause left truncation of the distribution. The empirical analysis shows that firms located in science parks have productivity that lags compared to those located in large cities and they benefit mainly from localization externalities.

Suggested Citation

  • Hasan, Syed M. & Klaiber, H. Allen & Sheldon, Ian, 2013. "Selection and Agglomeration Impact on Firm's Productivity: A Study of Taiwan's Manufacturing Sector," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 149743, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea13:149743
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    File URL: http://purl.umn.edu/149743
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    References listed on IDEAS

    as
    1. Pierre‐Philippe Combes & Gilles Duranton & Laurent Gobillon & Diego Puga & Sébastien Roux, 2012. "The Productivity Advantages of Large Cities: Distinguishing Agglomeration From Firm Selection," Econometrica, Econometric Society, vol. 80(6), pages 2543-2594, November.
    2. Chad Syverson, 2004. "Market Structure and Productivity: A Concrete Example," Journal of Political Economy, University of Chicago Press, vol. 112(6), pages 1181-1222, December.
    3. Marc J. Melitz & Gianmarco I. P. Ottaviano, 2008. "Market Size, Trade, and Productivity," Review of Economic Studies, Oxford University Press, vol. 75(1), pages 295-316.
    4. Fujita, Masahisa & Ogawa, Hideaki, 1982. "Multiple equilibria and structural transition of non-monocentric urban configurations," Regional Science and Urban Economics, Elsevier, vol. 12(2), pages 161-196, May.
    5. Olley, G Steven & Pakes, Ariel, 1996. "The Dynamics of Productivity in the Telecommunications Equipment Industry," Econometrica, Econometric Society, vol. 64(6), pages 1263-1297, November.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Agglomeration; Selection; Total Factor Productivity; Science Park; Community/Rural/Urban Development; Productivity Analysis; D24; R58; R12;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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