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

Listed author(s):
  • Dario Diodato
  • Frank Neffke,
  • Neave O’Clery

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.

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File URL: http://econ.geo.uu.nl/peeg/peeg1626.pdf
File Function: Version August 2016
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Paper provided by Utrecht University, Section of Economic Geography in its series Papers in Evolutionary Economic Geography (PEEG) with number 1626.

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Date of creation: Aug 2016
Date of revision: Aug 2016
Handle: RePEc:egu:wpaper:1626
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  1. Frank Neffke & Martin Henning & Ron Boschma, 2011. "How Do Regions Diversify over Time? Industry Relatedness and the Development of New Growth Paths in Regions," Economic Geography, Clark University, vol. 87(3), pages 237-265, 07.
  2. Edward L. Glaeser & Glenn Ellison, 1999. "The Geographic Concentration of Industry: Does Natural Advantage Explain Agglomeration?," American Economic Review, American Economic Association, vol. 89(2), pages 311-316, May.
  3. Beaudry, Catherine & Schiffauerova, Andrea, 2009. "Who's right, Marshall or Jacobs? The localization versus urbanization debate," Research Policy, Elsevier, vol. 38(2), pages 318-337, March.
  4. 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.
  5. Henri L.F. Groot & Jacques Poot & Martijn J. Smit, 2016. "Which Agglomeration Externalities Matter Most And Why?," Journal of Economic Surveys, Wiley Blackwell, vol. 30(4), pages 756-782, 09.
  6. Dauth, Wolfgang, 2010. "Agglomeration and regional employment growth," IAB Discussion Paper 201007, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
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