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Quantile Approach for Distinguishing Agglomeration from Firm Selection in Stata

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  • KONDO Keisuke

Abstract

Firms and workers, on average, are more productive in larger cities. One possible explanation which has been studied for a long time is that firms and workers in larger cities benefit from agglomeration economies. Another possible explanation is that the higher concentration of economic activities in larger cities forces tougher competition, and less productive firms cannot survive there. To distinguish agglomeration from firm selection, Combes et al. (2012, "The productivity advantages of large cities: Distinguishing agglomeration from firm selection," Econometrica, vol. 80) newly propose a quantile approach. This paper introduces the estquant command that implements their quantile approach in Stata. Our Monte Carlo experiments emphasize the importance of simultaneously considering agglomeration and selection.

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  • KONDO Keisuke, 2017. "Quantile Approach for Distinguishing Agglomeration from Firm Selection in Stata," Discussion papers 17901, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:17901
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    Cited by:

    1. Luigi Buzzacchi & Antonio De Marco & Marcello Pagnini, 2021. "Agglomeration and the Italian North-South divide," Questioni di Economia e Finanza (Occasional Papers) 637, Bank of Italy, Economic Research and International Relations Area.
    2. KONDO Keisuke, 2016. "Testing for Agglomeration Economies and Firm Selection in Spatial Productivity Differences: The case of Japan," Discussion papers 16098, Research Institute of Economy, Trade and Industry (RIETI).
    3. Chun‐Yu Ho & Yue Sheng, 2022. "Productivity advantage of large cities for creative industries," Papers in Regional Science, Wiley Blackwell, vol. 101(6), pages 1289-1306, December.
    4. Mohamed Amara, 2019. "Firm Performance and Agglomeration Effects: Evidence from Tunisian Firm-level Data," Working Papers 1297, Economic Research Forum, revised 2019.

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