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

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  • Jan Kluge
  • Robert Lehmann

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Abstract

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

Suggested Citation

  • Jan Kluge & Robert Lehmann, 2012. "Marshall or Jacobs? Answers to an unsuitable question from an interaction model," ifo Working Paper Series 124, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
  • Handle: RePEc:ces:ifowps:_124
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    Cited by:

    1. repec:spr:jahrfr:v:38:y:2018:i:1:d:10.1007_s10037-017-0115-x is not listed on IDEAS
    2. Stefan Arent & Alexander Eck & Michael Weber & Oskar Krohmer, 2012. "Income Risk, Saving and Taxation: Will Precautionary Saving Survive?," ifo Working Paper Series 125, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    3. Jan Kluge & Robert Lehmann, 2012. "Spezialisierung oder Diversifikation - was trägt stärker zum sektoralen Wachstum bei?," ifo Dresden berichtet, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 19(02), pages 19-25, April.
    4. Hirte, Georg & Stephan, Andreas, 2014. "Regionale Beschäftigungswirkungen von öffentlichen Investitionen in Straßen- und Schieneninfrastruktur," Discussion Papers 2/2014, Technische Universität Dresden, "Friedrich List" Faculty of Transport and Traffic Sciences, Institute of Transport and Economics.

    More about this item

    Keywords

    Localization and urbanization economies; interaction models; regional gross valued added;

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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