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Assessing agglomeration economies in a spatial framework with endogenous regressors

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  • Artis, Michael
  • Miguélez, Ernest
  • Moreno, Rosina

Abstract

This paper is concerned with the influence of agglomeration economies on economic outcomes across British regions. The concentration of economic activity in one place can foster economic performance due to the reduction in transportation costs, the ready availability of customers and suppliers, and knowledge spillovers. However, the concentration of several types of intangible assets can boost productivity as well. Thus, using an interesting dataset which proxies regional productivity, we will assess the relative importance of agglomeration and other assets, controlling both for endogeneity and for spatial autocorrelation at the same time. Our results suggest that agglomeration has a definite positive influence on productivity, although our estimates of its effect are dramatically reduced when spatial dependence and other hitherto omitted variables proxying intangible assets are controlled for.

Suggested Citation

  • Artis, Michael & Miguélez, Ernest & Moreno, Rosina, 2009. "Assessing agglomeration economies in a spatial framework with endogenous regressors," LSE Research Online Documents on Economics 33239, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:33239
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    1. Michael Artis & Declan Curran & Marianne Sensier, 2011. "Investigating Agglomeration Economies in a Panel of European Cities and Regions," SERC Discussion Papers 0078, Centre for Economic Performance, LSE.
    2. Konstantinos A. Melachroinos & Nigel Spence, 2013. "Intangible Investment and Regional Productivity in Great Britain," Regional Studies, Taylor & Francis Journals, vol. 47(7), pages 1048-1064, July.
    3. Hashiguchi, Yoshihiro & Chen, Kuang-hui, 2012. "Assessing agglomeration economies in the Yangzi River Delta, China : a bayesian spatial econometric approach," IDE Discussion Papers 339, Institute of Developing Economies, Japan External Trade Organization(JETRO).

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