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Agglomeration economies: the heterogeneous contribution of human capital and value chains

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  • Dario Diodato
  • Frank Neffke,
  • Neave O’Clery

Abstract

We document the heterogeneity across sectors in the impact labor and input-output links have on industry agglomeration. Exploiting the available degrees of freedom in coagglomeration patterns, we estimate the industry-specific benefits of sharing labor needs and supply links with local firms. On aggregate, coagglomeration patterns of services are at least as strongly driven by input-output linkages as those of manufacturing, whereas labor linkages are much more potent drivers of coagglomeration in services than in manufacturing. Moreover, the degree to which labor and input-output linkages are reflected in an industry’s coagglomeration patterns is relevant for predicting patterns of city-industry employment growth.

Suggested Citation

  • Dario Diodato & Frank Neffke, & Neave O’Clery, 2016. "Agglomeration economies: the heterogeneous contribution of human capital and value chains," Papers in Evolutionary Economic Geography (PEEG) 1626, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Aug 2016.
    • Handle: RePEc:egu:wpaper:1626
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    References listed on IDEAS

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    1. Hausmann, Ricardo & Hidalgo, Cesar A. & Stock, Daniel P. & Yildirim, Muhammed A., 2014. "Implied Comparative Advantage," Working Paper Series rwp14-003, Harvard University, John F. Kennedy School of Government.
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    More about this item

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • 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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