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The Logic of Agglomeration

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  • Gilles Duranton
  • William R. Kerr

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," NBER Working Papers 21452, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:21452
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    References listed on IDEAS

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    Cited by:

    1. Sandra Bernick & Richard Davies & Anna Valero, 2017. "Industry in Britain - An Atlas," CEP Special Papers 34, Centre for Economic Performance, LSE.
    2. 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.

    More about this item

    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
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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