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Agglomerative Forces and Cluster Shapes

  • William R. Kerr
  • Scott Duke Kominers

We model spatial clusters of similar firms. Our model highlights how agglomerative forces lead to localized, individual connections among firms, while interaction costs generate a defined distance over which attraction forces operate. Overlapping firm interactions yield agglomeration clusters that are much larger than the underlying agglomerative forces themselves. Empirically, we demonstrate that our model's assumptions are present in the structure of technology and labor flows within Silicon Valley and its surrounding areas. Our model further identifies how the lengths over which agglomerative forces operate influence the shapes and sizes of industrial clusters; we confirm these predictions using variations across both technology clusters and industry agglomeration.

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File URL: http://www.nber.org/papers/w16639.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 16639.

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Date of creation: Dec 2010
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Publication status: published as Kerr, William R., and Scott Duke Kominers. "Agglomerative Forces and Cluster Shapes." Review of Economics and Statistics 96, no. 3 (July 2014).
Handle: RePEc:nbr:nberwo:16639
Note: IO LS PR
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  1. Stuart S. Rosenthal & William C. Strange, 2003. "Geography, Industrial Organization, and Agglomeration," Center for Policy Research Working Papers 56, Center for Policy Research, Maxwell School, Syracuse University.
  2. Michael Greenstone & Richard Hornbeck & Enrico Moretti, 2010. "Identifying Agglomeration Spillovers: Evidence from Winners and Losers of Large Plant Openings," Journal of Political Economy, University of Chicago Press, vol. 118(3), pages 536-598, 06.
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  8. Kristian Behrens & Gilles Duranton & Frédéric Robert-Nicoud, 2013. "Productive cities: Sorting, selection, and agglomeration," Research Papers by the Institute of Economics and Econometrics, Geneva School of Economics and Management, University of Geneva 13111, Institut d'Economie et Econométrie, Université de Genève.
  9. Shihe Fu & Stephen L. Ross, 2007. "Wage Premia in Employment Clusters: Does Worker Sorting Bias Estimates?," Working papers 2007-26, University of Connecticut, Department of Economics, revised Dec 2009.
  10. Kristin Aarland & James Davis & J Vernon Henderson & Yukako Ono, 2004. "Spatial Organization of Firms: The Decision to Split Production and Administration," Working Papers 04-03, Center for Economic Studies, U.S. Census Bureau.
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  18. repec:bla:restud:v:75:y:2008:i:4:p:1011-1038 is not listed on IDEAS
  19. Lychagin, Sergey & Pinkse, Joris & Slade, Margaret E. & Van Reenen, John, 2010. "Spillovers in Space: Does Geography Matter?," CEPR Discussion Papers 7928, C.E.P.R. Discussion Papers.
  20. Tomoya Mori & Koji Nishikimi & Tony E. Smith, 2005. "A Divergence Statistic for Industrial Localization," The Review of Economics and Statistics, MIT Press, vol. 87(4), pages 635-651, November.
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  25. repec:fiu:wpaper:0401 is not listed on IDEAS
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