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Marshall or Jacobs? Answers to an unsuitable question from an interaction model

  • Jan Kluge

    ()

  • Robert Lehmann

    ()

This paper investigates whether localization economies as brought forward by Marshall(1890) or urbanization economies as mentioned by Jacobs (1970) are more decisive forregional gross value added per capita. Our novel approach is to explicitly allow forinterdependencies between these two theories and to take into account that the initiallevels of specialization and diversification might play a role. We therefore deploy amodel with interaction terms and find that these two theories are not mutually exclusivein most of our sectors. In addition, the empirical results show that the initial levels ofspecialization and diversification do matter as well.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-Ifo_Working_Papers/wp-ifo-2012/IfoWorkingPaper-124.pdf
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Paper provided by Ifo Institute for Economic Research at the University of Munich in its series Ifo Working Paper Series with number ifo Working Paper No. 124.

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Date of creation: 2012
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Handle: RePEc:ces:ifowps:_124
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  1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-37, October.
  2. Almeida, Rita, 2005. "Local economic structure and growth," Policy Research Working Paper Series 3728, The World Bank.
  3. Fuchs, Michaela, 2009. "The determinants of local employment dynamics in Western Germany," IAB Discussion Paper 200918, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  4. Annette Illy & Michael Schwartz & Christoph Hornych & Martin T.W. Rosenfeld, 2011. "Local Economic Structure And Sectoral Employment Growth In German Cities," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 102(5), pages 582-593, December.
  5. Federico Cingano & Fabiano Schivardi, 2003. "Identifying the Sources of Local Productivity Growth," Temi di discussione (Economic working papers) 474, Bank of Italy, Economic Research and International Relations Area.
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  7. Jens Suedekum & Uwe Blien, 2005. "Local Economic Structure and Industry Development in Germany, 1993-2001," Economics Bulletin, AccessEcon, vol. 15(17), pages 1-8.
  8. Martin, Philippe & Mayer, Thierry & Mayneris, Florian, 2011. "Spatial concentration and plant-level productivity in France," Journal of Urban Economics, Elsevier, vol. 69(2), pages 182-195, March.
  9. M. Hashem Pesaran, 2004. "General Diagnostic Tests for Cross Section Dependence in Panels," CESifo Working Paper Series 1229, CESifo Group Munich.
  10. Combes, Pierre-Philippe, 2000. "Economic Structure and Local Growth: France, 1984-1993," Journal of Urban Economics, Elsevier, vol. 47(3), pages 329-355, May.
  11. Glaeser, Edward Ludwig & Kallal, Hedi D. & Scheinkman, Jose A. & Shleifer, Andrei, 1992. "Growth in Cities," Scholarly Articles 3451309, Harvard University Department of Economics.
  12. de Lucio, Juan J. & Herce, Jose A. & Goicolea, Ana, 2002. "The effects of externalities on productivity growth in Spanish industry," Regional Science and Urban Economics, Elsevier, vol. 32(2), pages 241-258, March.
  13. J. Vernon Henderson & Ari Kuncoro & Matthew Turner, 1992. "Industrial Development in Cities," NBER Working Papers 4178, National Bureau of Economic Research, Inc.
  14. James H. Stock & Motohiro Yogo, 2002. "Testing for Weak Instruments in Linear IV Regression," NBER Technical Working Papers 0284, National Bureau of Economic Research, Inc.
  15. Paul Krugman, 2011. "The New Economic Geography, Now Middle-aged," Regional Studies, Taylor & Francis Journals, vol. 45(1), pages 1-7.
  16. Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2003. "Instrumental variables and GMM: Estimation and testing," Stata Journal, StataCorp LP, vol. 3(1), pages 1-31, March.
  17. Beaudry, Catherine & Schiffauerova, Andrea, 2009. "Who's right, Marshall or Jacobs? The localization versus urbanization debate," Research Policy, Elsevier, vol. 38(2), pages 318-337, March.
  18. Robert Dekle, 2002. "Industrial Concentration And Regional Growth: Evidence From The Prefectures," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 310-315, May.
  19. Daniel Hoechle, 2007. "Robust standard errors for panel regressions with cross-sectional dependence," Stata Journal, StataCorp LP, vol. 7(3), pages 281-312, September.
  20. repec:spo:wpecon:info:hdl:2441/c8dmi8nm4pdjkuc9g8mc6ihim is not listed on IDEAS
  21. John C. Driscoll & Aart C. Kraay, 1998. "Consistent Covariance Matrix Estimation With Spatially Dependent Panel Data," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 549-560, November.
  22. Raffaele Paci & Stefano Usai, 2005. "Agglomeration Economies and Growth in Italian Local Labour Systems 1991-2001," ERSA conference papers ersa05p46, European Regional Science Association.
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