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The Logic of Agglomeration

Author

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  • Gilles Duranton

    (University of Pennsylvania Wharton School)

  • William R. Kerr

    (Harvard Business School, Entrepreneurial Management Unit)

Abstract

This review discusses frontier topics in economic geography as they relate to firms and agglomeration economies. We focus on areas where empirical research is scarce but possible. We first outline a conceptual framework for city formation that allows us to contemplate what empiricists might study when using firm-level data to compare the functioning of cities and industries with each other. We then examine a second model of the internal structure of a cluster to examine possibilities with firm-level data for better exposing the internal operations of clusters. An overwhelming theme of our review is the vast scope for enhancements of our picture of agglomeration with the new data that are emerging.

Suggested Citation

  • Gilles Duranton & William R. Kerr, 2015. "The Logic of Agglomeration," Harvard Business School Working Papers 16-037, Harvard Business School.
  • Handle: RePEc:hbs:wpaper:16-037
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    2. Stich, Christoph & Tranos, Emmanouil & Nathan, Max, 2021. "Modelling Clusters From The Ground Up: A Web Data Approach," SocArXiv j2w8v, Center for Open Science.
    3. Peter H. Egger & Marko Köthenbürger & Gabriel Loumeau, 2017. "Local Border Reforms and Economic Activity," CESifo Working Paper Series 6738, CESifo.
    4. Nathan, Max, 2019. "Does light touch cluster policy work? Evaluating the tech city programme," LSE Research Online Documents on Economics 103421, London School of Economics and Political Science, LSE Library.
    5. Madaleno, Margarida & Nathan, Max & Overman, Henry & Waights, Sevrin, 2018. "Incubators, Accelerators and Regional Economic Development," IZA Discussion Papers 11856, Institute of Labor Economics (IZA).
    6. Sandra Bernick & Richard Davies & Anna Valero, 2017. "Industry in Britain: an atlas," CentrePiece - The magazine for economic performance 513, Centre for Economic Performance, LSE.
    7. Emil Malizia & Yan Chen, 2019. "The Economic Growth and Development Outcomes Related to Vibrancy: An Empirical Analysis of Major Employment Centers in Large U.S. Cities," Economic Development Quarterly, , vol. 33(4), pages 255-266, November.
    8. Nancy Lozano-Gracia, 2020. "COVID and cities – A new demon that points at old problems: How can research help?," Environment and Planning B, , vol. 47(7), pages 1128-1132, September.
    9. Rusanovskiy, Viktor (Русановский, Виктор) & Markov, Vladimir (Марков, Владимир) & Brovkova, Anna (Бровкова, Анна), 2018. "Modeling the Effects of Spatial Localization in Urban Agglomerations of Russia [Моделирование Эффекта Пространственной Локализации В Городских Агломерациях России]," Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 6, December.
    10. Laura Alfaro & Maggie X. Chen, 2016. "Location Fundamentals, Agglomeration Economies, and the Geography of Multinational Firms," Working Papers 2016-18, The George Washington University, Institute for International Economic Policy.
    11. Hiroki INOUE & Hiromi SAITO & Shigeru SUGIHARA & Shigeru HIROTA & Taisuke KAMEDA, 2017. "Agglomeration and Networking in Academic Research," Economic Analysis, Economic and Social Research Institute (ESRI), vol. 194, pages 93-124, May.
    12. Paal Brevik Wangsness & Kenneth Løvold Rødseth & Wiljar Hansen, 2017. "A review of guidelines for including wider economic impacts in transport appraisal," Transport Reviews, Taylor & Francis Journals, vol. 37(1), pages 94-115, January.

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    More about this item

    Keywords

    Agglomeration; clusters; cities; innovation;
    All these keywords.

    JEL classification:

    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • L6 - Industrial Organization - - Industry Studies: Manufacturing
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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