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Determinants of Industrial Coagglomeration and Establishment-level Productivity

Author

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  • FUJII Daisuke
  • NAKAJIMA Kentaro
  • SAITO Yukiko

Abstract

This paper investigates the relationships between determinants of industrial coagglomeration and establishment-level productivity. For each pair of industries, we first construct the degree of coagglomeration and indices for three factors of coagglomeration: inter-firm transactions, knowledge spillovers, and labor market pooling. We then examine correlation between these three factors and the degree of coagglomeration. Overall, inter-firm transactions and labor market pooling are positively correlated with the degree of coagglomeration whereas knowledge spillovers have no significant relationship with coagglomeration. We also find that the determinants of coagglomeration are quite different across industries. Further, we examine the relationships between these factors and establishment-level productivity. We find that the determinants of coagglomeration are not necessarily positively associated with the productivity of establishments.

Suggested Citation

  • FUJII Daisuke & NAKAJIMA Kentaro & SAITO Yukiko, 2015. "Determinants of Industrial Coagglomeration and Establishment-level Productivity," Discussion papers 15077, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:15077
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    1. Pierre‐Philippe Combes & Gilles Duranton & Laurent Gobillon & Diego Puga & Sébastien Roux, 2012. "The Productivity Advantages of Large Cities: Distinguishing Agglomeration From Firm Selection," Econometrica, Econometric Society, vol. 80(6), pages 2543-2594, November.
    2. Gilles Duranton & Henry G. Overman, 2005. "Testing for Localization Using Micro-Geographic Data," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 72(4), pages 1077-1106.
    3. Rosenthal, Stuart S. & Strange, William C., 2001. "The Determinants of Agglomeration," Journal of Urban Economics, Elsevier, vol. 50(2), pages 191-229, September.
    4. Nakajima, Kentaro & Saito, Yukiko Umeno & Uesugi, Iichiro, 2012. "Measuring economic localization: Evidence from Japanese firm-level data," Journal of the Japanese and International Economies, Elsevier, vol. 26(2), pages 201-220.
    5. Glenn Ellison & Edward L. Glaeser & William R. Kerr, 2010. "What Causes Industry Agglomeration? Evidence from Coagglomeration Patterns," American Economic Review, American Economic Association, vol. 100(3), pages 1195-1213, June.
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    More about this item

    JEL classification:

    • 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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