Geographic concentration and establishment scale: can panel data tell us more ?
In a recent study, Holmes and Stevens (2002) identify for the first time a positive relationship that exists between establishment scale and local industry concentration using a large cross-sectional plant level data set for the US. Using an exhaustive plant level panel data set for Irish manufacturing covering nearly three decades, we are able to extend their analysis in two ways. Firstly, we show that failing to control for fixed effects biases the relationship upward, although the essence of it still remains. Secondly, the link is substantially weaker when plants locate for the first time in anarea, but strengthens with age for those that survive in the long run. We link our results to recent contributions on the dynamics of geographic concentration.
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- Duranton, Gilles & Overman, Henry G, 2002.
"Testing for Localization Using Micro-Geographic Data,"
CEPR Discussion Papers
3379, C.E.P.R. Discussion Papers.
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- Duranton, Gilles & Henry G Overman, 2003. "Testing for Localisation Using Micro-Geographic Data," Royal Economic Society Annual Conference 2003 69, Royal Economic Society.
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120, Department of Economics and Business, Universitat Pompeu Fabra.
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The Review of Economics and Statistics,
MIT Press, vol. 84(2), pages 193-204, May.
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- Geroski, P. A., 1995. "What do we know about entry?," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 421-440, December.
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