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Vertical Industry Linkages: Sources Of Productivity Gains And Cumulative Causation

  • Steen, Frode
  • Ulltveit-Moe, Karen-Helene

In this paper we analyse vertical industry linkages, and the extent to which these work as channels for externalities. First, we test for activity-based externalities stemming from output growth and output level in vertically linked industries. Second, we aim at revealing the importance of a large home market for upstream industries. Eventually, by comparing results on localized inter-industry externalities and on the impact of local sales, we try to identify to what extent the geographical agglomeration of an industry is self-reinforcing. A number of Norwegian maritime transport and services sectors are analysed. The results are promising in the sense that the model distinguishes empirically between different sources of externalities, and unveils which vertical linkages that give rise to endogenous agglomeration.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 2467.

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Date of creation: May 2000
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Handle: RePEc:cpr:ceprdp:2467
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  1. Knarvik, Karen Helene Midelfart & Steen, Frode, 1999. " Self-Reinforcing Agglomerations? An Empirical Industry Study," Scandinavian Journal of Economics, Wiley Blackwell, vol. 101(4), pages 515-32, December.
  2. Basu, S. & Fernald, J.G., 1993. "Are Apparent Productive Spillovers a Figment of Specification Error," Papers 93-22, Michigan - Center for Research on Economic & Social Theory.
  3. Masahisa Fujita & Paul Krugman & Anthony J. Venables, 2001. "The Spatial Economy: Cities, Regions, and International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262561476, June.
  4. Klette, T.J., 1998. "Market Power, Scale Economies and Productivity: Estimates from a Panel of Establishment Data," Memorandum 15/1998, Oslo University, Department of Economics.
  5. Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-70, May.
  6. Paul M Romer, 1999. "Endogenous Technological Change," Levine's Working Paper Archive 2135, David K. Levine.
  7. Baldwin, John R & Gorecki, Paul K, 1994. "Concentration and Mobility Statistics in Canada's Manufacturing Sector," Journal of Industrial Economics, Wiley Blackwell, vol. 42(1), pages 93-103, March.
  8. Caballero, R.J. & Lyons, R.K., 1989. "Internal Versus External Economies In European Industry," Discussion Papers 1989_10, Columbia University, Department of Economics.
  9. Anthony J. Venables, 1993. "Equilibrium Locations of Vertically Linked Industries," CEP Discussion Papers dp0137, Centre for Economic Performance, LSE.
  10. S. W. Davies & Paul A. Geroski, 2000. "Changes In Concentration, Turbulence, And The Dynamics Of Market Shares," The Review of Economics and Statistics, MIT Press, vol. 79(3), pages 383-391, August.
  11. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June.
  12. Markusen, James R, 1989. "Trade in Producer Services and in Other Specialized Intermediate Inputs," American Economic Review, American Economic Association, vol. 79(1), pages 85-95, March.
  13. Ottaviano, Gianmarco & Puga, Diego, 1997. "Agglomeration in the Global Economy: A Survey of the 'New Economic Geography'," CEPR Discussion Papers 1699, C.E.P.R. Discussion Papers.
  14. Lambson, V.E., 1989. "Industry Evolution With Sunk Costs And Uncertian Market Conditions," Working papers 8904, Wisconsin Madison - Social Systems.
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