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Concentration, agglomeration and the size of plants

  • Miren Lafourcade

    (PSE - Paris-Jourdan Sciences Economiques - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC), IUT - Département "Gestion, Logistique et Transports" - UEVE - Université d'Évry-Val-d'Essonne)

  • Giordano Mion

    (CORE - Center of Operation Research and Econometrics [Louvain] - UCL - Université Catholique de Louvain, FNRS - Fonds de la Recherche Scientifique - Fonds de la Recherche Scientifique [FNRS])

This paper investigates whether the geographic distribution of manufacturing activities depends on the size of plants. Using Italian data we find, as in Kim (1995) and Holmes and Stevens (2002, 2004), that large plants are more concentrated than small plants. However, considering distance-based patterns via spatial auto-correlation, we find that small establishments actually exhibit a greater tendency to be located in adjacent areas. These apparently contradictory findings raise a measurement issue regarding co-location externalities, and suggest that large plants are more likely to cluster within narrow geographical units (concentration), while small establishments would rather co-locate within wider distance-based clusters (agglomeration). This picture is consistent with different size plants engaging in different transport-intensive activities.

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Paper provided by HAL in its series PSE Working Papers with number halshs-00590572.

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Date of creation: Nov 2005
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Handle: RePEc:hal:psewpa:halshs-00590572
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