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Vertical Industry Linkages: Sources of Productivity Gains and Cumulative Causation?

  • Knarvik, K.H.M.
  • Steen, F.

In this paper we analyse vertical industry linkages and the extent to which these work as channels for externalities. First, activity based externalities stemming from output growth and output level in vertically linked industries are tested for. Second, we aim at revealing the importance of a large home market for upstream industries. Eventually, by comparing results on localised inter-industry externalities as well as significance of local sales linkages, we try to identify to what extent the geographical agglomeration of an industry is self-reinforcing. A number of Norwegian maritime transport and services sectors are analysed. The results are promising in the sense that the model distinguishes empirically between different sources of externalities, and unveils which vertical linkages that give rise to endogenous agglomeration.

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Paper provided by Norwegian School of Economics and Business Administration- in its series Papers with number 1/2000.

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Length: 19 pages
Date of creation: 2000
Date of revision:
Handle: RePEc:fth:norgee:1/2000
Contact details of provider: Postal:
NORWEGIAN SCHOOL OF ECONOMICS AND BUSINESS ADMINISTRATION, HELLEVEIEN 30, 5035 BERGEN SANDVIKEN NORWAY.

Phone: 5595 9000
Fax: 5595 9100
Web page: http://www.nhh.no/
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  1. Susanto Basu & John G. Fernald, 1994. "Are apparent productive spillovers a figment of specification error?," International Finance Discussion Papers 463, Board of Governors of the Federal Reserve System (U.S.).
  2. S. W. Davies & Paul A. Geroski, 2000. "Changes In Concentration, Turbulence, And The Dynamics Of Market Shares," The Review of Economics and Statistics, MIT Press, vol. 79(3), pages 383-391, August.
  3. Knarvik, Karen Helene Midelfart & Steen, Frode, 1999. " Self-Reinforcing Agglomerations? An Empirical Industry Study," Scandinavian Journal of Economics, Wiley Blackwell, vol. 101(4), pages 515-32, December.
  4. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S71-102, October.
  5. Anthony J. Venables, 1993. "Equilibrium Locations of Vertically Linked Industries," CEP Discussion Papers dp0137, Centre for Economic Performance, LSE.
  6. Baldwin, John R & Gorecki, Paul K, 1994. "Concentration and Mobility Statistics in Canada's Manufacturing Sector," Journal of Industrial Economics, Wiley Blackwell, vol. 42(1), pages 93-103, March.
  7. Gianmarco I. P. Ottaviano & Diego Puga, 1998. "Agglomeration in the Global Economy: A Survey of the 'New Economic Geography'," The World Economy, Wiley Blackwell, vol. 21(6), pages 707-731, 08.
  8. Caballero, Ricardo J. & Lyons, Richard K., 1990. "Internal versus external economies in European industry," European Economic Review, Elsevier, vol. 34(4), pages 805-826, June.
  9. Masahisa Fujita & Paul Krugman & Anthony J. Venables, 2001. "The Spatial Economy: Cities, Regions, and International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262561476.
  10. Lambson, V.E., 1989. "Industry Evolution With Sunk Costs And Uncertian Market Conditions," Working papers 8904, Wisconsin Madison - Social Systems.
  11. Markusen, James R, 1989. "Trade in Producer Services and in Other Specialized Intermediate Inputs," American Economic Review, American Economic Association, vol. 79(1), pages 85-95, March.
  12. Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-70, May.
  13. Paul Krugman, 1990. "Increasing Returns and Economic Geography," NBER Working Papers 3275, National Bureau of Economic Research, Inc.
  14. Klette, Tor Jakob, 1999. "Market Power, Scale Economies and Productivity: Estimates from a Panel of Establishment Data," Journal of Industrial Economics, Wiley Blackwell, vol. 47(4), pages 451-76, December.
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