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Agglomerative Forces and Cluster Shapes

  • William R. Kerr
  • Scott Duke Kominers

We model spatial clusters of similar firms. Our model highlights how agglomerative forces lead to localized, individual connections among firms, while interaction costs generate a defined distance over which attraction forces operate. Overlapping firm interactions yield agglomeration clusters that are much larger than the underlying agglomerative forces themselves. Empirically, we demonstrate that our model’s assumptions are present in the structure of technology and labor flows within Silicon Valley and its surrounding areas. Our model further identifies how the lengths over which agglomerative forces operate influence the shapes and sizes of industrial clusters; we confirm these predictions using variations across both technology clusters and industry agglomeration.

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File URL: http://www2.census.gov/ces/wp/2012/CES-WP-12-09.pdf
File Function: First version, 2012
Download Restriction: no

Paper provided by Center for Economic Studies, U.S. Census Bureau in its series Working Papers with number 12-09.

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Length: 68 pages
Date of creation: Jun 2012
Date of revision:
Handle: RePEc:cen:wpaper:12-09
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  1. Edward Glaeser & William Kerr & Giacomo Ponzetto, 2009. "Clusters of Entrepreneurship," Working Papers 09-36, Center for Economic Studies, U.S. Census Bureau.
  2. Behrens, Kristian & Duranton, Gilles & Robert-Nicoud, Frédéric, 2010. "Productive cities: Sorting, selection and agglomeration," CEPR Discussion Papers 7922, C.E.P.R. Discussion Papers.
  3. Bruce Fallick & Charles A. Fleischman & James B. Rebitzer, 2006. "Job-Hopping in Silicon Valley: Some Evidence Concerning the Microfoundations of a High-Technology Cluster," The Review of Economics and Statistics, MIT Press, vol. 88(3), pages 472-481, August.
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  8. Tomoya Mori & Koji Nishikimi & Tony E. Smith, 2004. "A Divergence Statistic for Industrial Localization," KIER Working Papers 587, Kyoto University, Institute of Economic Research.
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  12. repec:bla:restud:v:75:y:2008:i:4:p:1011-1038 is not listed on IDEAS
  13. Peter Thompson & Melanie Fox Kean, 2004. "Patent Citations and the Geography of Knowledge Spillovers: A Reassessment," Working Papers 0401, Florida International University, Department of Economics.
  14. Greenstone, Michael & Hornbeck, Richard A. & Moretti, Enrico, 2010. "Identifying Agglomeration Spillovers: Evidence from Winners and Losers of Large Plant Openings," Scholarly Articles 11185831, Harvard University Department of Economics.
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  17. Natarajan Balasubramanian & Jagadeesh Sivadasan, 2008. "What Happens When Firms Patent? New Evidence from U.S. Economic Census Data," Working Papers 08-03, Center for Economic Studies, U.S. Census Bureau.
  18. Nathaniel Baum-Snow, 2010. "Changes in Transportation Infrastructure and Commuting Patterns in US Metropolitan Areas, 1960-2000," American Economic Review, American Economic Association, vol. 100(2), pages 378-82, May.
  19. Kristin Aarland & James C. Davis & J. Vernon Henderson & Yukako Ono, 2007. "Spatial organization of firms: the decision to split production and administration," RAND Journal of Economics, RAND Corporation, vol. 38(2), pages 480-494, 06.
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  21. Stuart S. Rosenthal & William C. Strange, 2003. "Geography, Industrial Organization, and Agglomeration," Center for Policy Research Working Papers 56, Center for Policy Research, Maxwell School, Syracuse University.
  22. Partridge, Mark D. & Rickman, Dan S. & Ali, Kamar & Olfert, M. Rose, 2009. "Agglomeration spillovers and wage and housing cost gradients across the urban hierarchy," Journal of International Economics, Elsevier, vol. 78(1), pages 126-140, June.
  23. Thomas J. Holmes & John J. Stevens, 2002. "Geographic Concentration and Establishment Scale," The Review of Economics and Statistics, MIT Press, vol. 84(4), pages 682-690, November.
  24. Shihe Fu & Stephen L. Ross, 2007. "Wage Premia in Employment Clusters: Does Worker Sorting Bias Estimates?," Working papers 2007-26, University of Connecticut, Department of Economics, revised Dec 2009.
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