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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" - Université d'Evry-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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Date of creation: Nov 2005
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Handle: RePEc:hal:psewpa:halshs-00590572
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  1. Glenn Ellison & Edward L. Glaeser, 1994. "Geographic Concentration in U.S. Manufacturing Industries: A Dartboard Approach," NBER Working Papers 4840, National Bureau of Economic Research, Inc.
  2. Anne-Célia Disdier & Keith Head, 2008. "The Puzzling Persistence of the Distance Effect on Bilateral Trade," The Review of Economics and Statistics, MIT Press, vol. 90(1), pages 37-48, February.
  3. Miren Lafourcade & Pierre-Philippe Combes, 2005. "Transport Costs: Measures, Determinants and Regional Policy Implications for France," Post-Print halshs-00754078, HAL.
  4. Richard E. Baldwin & Toshihiro Okubo, 2006. "Heterogeneous firms, agglomeration and economic geography: spatial selection and sorting," Journal of Economic Geography, Oxford University Press, vol. 6(3), pages 323-346, June.
  5. Pierre-Philippe Combes & Henry Overman, 2003. "The Spatial Distribution of Economic Activities in the European Union," CEP Discussion Papers dp0587, Centre for Economic Performance, LSE.
  6. Eaton, Jonathan & Kortum, Samuel S & Kramarz, Francis, 2009. "An Anatomy of International Trade: Evidence from French Firms," CEPR Discussion Papers 7111, C.E.P.R. Discussion Papers.
  7. Michael Devereux & Rachel Griffith & Helen Simpson, 1999. "The geographic distribution of production activity in the UK," IFS Working Papers W99/26, Institute for Fiscal Studies.
  8. Barrios, Salvador & Bertinelli, Luisito & Strobl, E. & Teixeira, Antonio-Carlos, 2005. "The dynamics of agglomeration: evidence from Ireland and Portugal," Journal of Urban Economics, Elsevier, vol. 57(1), pages 170-188, January.
  9. LAFOURCADE, Miren & MION, Giordano, . "Concentration, agglomeration and the size of plants," CORE Discussion Papers RP 1963, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  10. BARRIOS, Salvador & BERTINELLI, Luisito & STROBL, Eric, 2003. "Geographic concentration and establishment scale: can panel data tell us more ?," CORE Discussion Papers 2003036, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  11. Giuseppe Arbia, 2001. "articles: Modelling the geography of economic activities on a continuous space," Papers in Regional Science, Springer;Regional Science Association International, vol. 80(4), pages 411-424.
  12. Gilles Duranton & Henry Overman, 2002. "Testing for Localisation Using Micro-Geographic Data," CEP Discussion Papers dp0540, Centre for Economic Performance, LSE.
  13. Karen Helen Midelfart-Knarvik & Henry G. Overman & Stephen Redding & Anthony J. Venables, 2002. "Integration and Industrial Specialisation in the European Union," Revue Économique, Programme National Persée, vol. 53(3), pages 469-481.
  14. Ciccone, Antonio & Hall, Robert E, 1996. "Productivity and the Density of Economic Activity," American Economic Review, American Economic Association, vol. 86(1), pages 54-70, March.
  15. Thomas J. Holmes & John J. Stevens, 2002. "Geographic Concentration and Establishment Scale," The Review of Economics and Statistics, MIT Press, vol. 84(4), pages 682-690, November.
  16. Maurel, Francoise & Sedillot, Beatrice, 1999. "A measure of the geographic concentration in french manufacturing industries," Regional Science and Urban Economics, Elsevier, vol. 29(5), pages 575-604, September.
  17. Holmes, Thomas J. & Stevens, John J., 2004. "Spatial distribution of economic activities in North America," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 63, pages 2797-2843 Elsevier.
  18. Fujita, Masahisa & Mori, Tomoya & Henderson, J. Vernon & Kanemoto, Yoshitsugu, 2004. "Spatial distribution of economic activities in Japan and China," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 65, pages 2911-2977 Elsevier.
  19. Antonio Ciccone, 1998. "Agglomeration-effects in Europe," Economics Working Papers 499, Department of Economics and Business, Universitat Pompeu Fabra, revised Aug 1999.
  20. Marcello Pagnini, 2003. "Misura e determinanti dell’agglomerazione spaziale nei comparti industriali in Italia," Rivista di Politica Economica, SIPI Spa, vol. 93(2), pages 149-, March-Apr.
  21. Eric Marcon & Florence Puech, 2003. "Evaluating the geographic concentration of industries using distance-based methods," Journal of Economic Geography, Oxford University Press, vol. 3(4), pages 409-428, October.
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