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Technology and industrial agglomeration: evidence from computer usage

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  • Christopher H. Wheeler

Abstract

Although the association between industrial agglomeration and productivity has been widely examined and documented, little work has explored the possibility that these `external' productivity shifts are the product of more advanced technologies. This paper offers a look at this hypothesis using data on individual-level computer usage across a sample of U.S. metropolitan areas over the years 1984, 1989, 1993, and 1997. The results indicate that, for a wide array of industries at the two-, three-, and four-digit SIC level, an industry's scale within a metropolitan area is positively associated with the frequency of computer use by its workers. However, in spite of these observable differences in workplace technology, I also find that estimated localization effects on wages are largely not explained by computer usage. Even after controlling for computer use, there remain significant own-industry scale effects in labor earnings.

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  • Christopher H. Wheeler, 2005. "Technology and industrial agglomeration: evidence from computer usage," Working Papers 2005-016, Federal Reserve Bank of St. Louis.
  • Handle: RePEc:fip:fedlwp:2005-016
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    Technology; Industrial location;

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