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Geographic concentration and establishment scale: can panel data tell us more ?


  • BARRIOS, Salvador
  • BERTINELLI, Luisito
  • STROBL, Eric


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.

Suggested Citation

  • BARRIOS, Salvador & BERTINELLI, Luisito & STROBL, Eric, 2003. "Geographic concentration and establishment scale: can panel data tell us more ?," CORE Discussion Papers 2003036, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  • Handle: RePEc:cor:louvco:2003036

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    References listed on IDEAS

    1. Ciccone, Antonio & Hall, Robert E, 1996. "Productivity and the Density of Economic Activity," American Economic Review, American Economic Association, vol. 86(1), pages 54-70, March.
    2. Guy Dumais & Glenn Ellison & Edward L. Glaeser, 2002. "Geographic Concentration As A Dynamic Process," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 193-204, May.
    3. Gilles Duranton & Henry G. Overman, 2005. "Testing for Localization Using Micro-Geographic Data," Review of Economic Studies, Oxford University Press, vol. 72(4), pages 1077-1106.
    4. 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.
    5. Henderson I. Vernon, 1994. "Where Does an Industry Locate?," Journal of Urban Economics, Elsevier, vol. 35(1), pages 83-104, January.
    6. 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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    Cited by:

    1. Lafourcade, Miren & Mion, Giordano, 2007. "Concentration, agglomeration and the size of plants," Regional Science and Urban Economics, Elsevier, vol. 37(1), pages 46-68, January.
    2. LAFOURCADE, Miren & MION, Giordano, 2003. "Concentration, spatial clustering and the size of plants : disentangling the sources of co-location externalities," CORE Discussion Papers 2003091, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).

    More about this item


    agglomeration; plant size; Ireland;

    JEL classification:

    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models


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