IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/7358.html
   My bibliography  Save this paper

Marshall's Economies

Author

Listed:
  • Vernon Henderson

Abstract

This paper estimates the nature and magnitude of the local externalities from own industry scale, as envisioned by Marshall. Census panel data on individual plants in high-tech and machinery industries across up to 487 countries are utilized, to quantify the direct effects of local external environment on plant productivity. Careful attention is paid to endogeneity issues in estimation. Magnitudes of scale externalities for corporate versus single plant firms are estimated and the sources of externalities (employment, numbers of plants, numbers of births, etc.) and extent (within the county versus extending to the rest of the MSA) are investigated. The paper asks in addition whether externalities are static or dynamic, a key issue in thinking about urban growth and industrial mobility; and whether they are dependent just on local own industry activity or also on overall local urban scale and/or diversity, a key issue in analyzing industrial composition and development of cities. The paper relates the findings on externalities for different industries to the extent of agglomeration and the degree of mobility of those industries across cities.

Suggested Citation

  • Vernon Henderson, 1999. "Marshall's Economies," NBER Working Papers 7358, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:7358
    Note: EFG PE
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w7358.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. 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.
    2. Eaton, Jonathan & Eckstein, Zvi, 1997. "Cities and growth: Theory and evidence from France and Japan," Regional Science and Urban Economics, Elsevier, vol. 27(4-5), pages 443-474, August.
    3. Randy A. Becker & J. Vernon Henderson, 2001. "Costs of Air Quality Regulation," NBER Chapters,in: Behavioral and Distributional Effects of Environmental Policy, pages 159-186 National Bureau of Economic Research, Inc.
    4. Henderson, J. Vernon, 1986. "Efficiency of resource usage and city size," Journal of Urban Economics, Elsevier, vol. 19(1), pages 47-70, January.
    5. Arthur, W. Brian, 1990. "'Silicon Valley' locational clusters: when do increasing returns imply monopoly?," Mathematical Social Sciences, Elsevier, vol. 19(3), pages 235-251, June.
    6. Steven J. Davis & John C. Haltiwanger & Scott Schuh, 1998. "Job Creation and Destruction," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262540932, January.
    7. Henderson, Vernon & Kuncoro, Ari & Turner, Matt, 1995. "Industrial Development in Cities," Journal of Political Economy, University of Chicago Press, vol. 103(5), pages 1067-1090, October.
    8. Duncan Black & Vernon Henderson, 2003. "Urban evolution in the USA," Journal of Economic Geography, Oxford University Press, vol. 3(4), pages 343-372, October.
    9. Beardsell, Mark & Henderson, Vernon, 1999. "Spatial evolution of the computer industry in the USA," European Economic Review, Elsevier, vol. 43(2), pages 431-456, February.
    10. Glaeser, Edward L & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1992. "Growth in Cities," Journal of Political Economy, University of Chicago Press, vol. 100(6), pages 1126-1152, December.
      • Edward L. Glaeser & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1991. "Growth in Cities," NBER Working Papers 3787, National Bureau of Economic Research, Inc.
      • Glaeser, Edward Ludwig & Kallal, Hedi D. & Scheinkman, Jose A. & Shleifer, Andrei, 1992. "Growth in Cities," Scholarly Articles 3451309, Harvard University Department of Economics.
    11. Leo Sveikauskas, 1975. "The Productivity of Cities," The Quarterly Journal of Economics, Oxford University Press, vol. 89(3), pages 393-413.
    12. Thomas J. Holmes, 1998. "The Effect of State Policies on the Location of Manufacturing: Evidence from State Borders," Journal of Political Economy, University of Chicago Press, vol. 106(4), pages 667-705, August.
    13. Duncan Black & Vernon Henderson, 1999. "A Theory of Urban Growth," Journal of Political Economy, University of Chicago Press, vol. 107(2), pages 252-284, April.
    14. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. J. Vernon Henderson, Zmarak Shalizi, and Anthony J. Venables, 2001. "Geography and development," Journal of Economic Geography, Oxford University Press, vol. 1(1), pages 81-105, January.
    2. Gilles Duranton & Diego Puga, 2001. "Nursery Cities: Urban Diversity, Process Innovation, and the Life Cycle of Products," American Economic Review, American Economic Association, vol. 91(5), pages 1454-1477, December.
    3. Gilles Duranton & Diego Puga, 2000. "Diversity and Specialisation in Cities: Why, Where and When Does it Matter?," Urban Studies, Urban Studies Journal Limited, vol. 37(3), pages 533-555, March.
    4. Martin Andersson & Lina Bjerke & Charlie Karlsson, 2014. "Imports and regional development," Chapters,in: Knowledge, Innovation and Space, chapter 4, pages 80-102 Edward Elgar Publishing.
    5. Devereux, Michael P. & Griffith, Rachel & Simpson, Helen, 2004. "The geographic distribution of production activity in the UK," Regional Science and Urban Economics, Elsevier, vol. 34(5), pages 533-564, September.
    6. Andrés Rodríguez-Pose & Riccardo Crescenzi, 2008. "Mountains in a flat world: why proximity still matters for the location of economic activity," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 1(3), pages 371-388.
    7. Riccardo Crescenzi & Andrés Rodríguez-Pose & Michael Storper, 2007. "The geographical processes behind innovation: A Europe-United States comparative analysis," Working Papers 2007-13, Instituto Madrileño de Estudios Avanzados (IMDEA) Ciencias Sociales.
    8. Patrick Bayer & Christopher Timmins, 2007. "Estimating Equilibrium Models Of Sorting Across Locations," Economic Journal, Royal Economic Society, vol. 117(518), pages 353-374, March.
    9. Henderson, Vernon, 2000. "How urban concentration affects economic growth," Policy Research Working Paper Series 2326, The World Bank.
    10. Wayne B. Gray & Ronald J. Shadbegian, 2007. "The Environmental Performance Of Polluting Plants: A Spatial Analysis," Journal of Regional Science, Wiley Blackwell, vol. 47(1), pages 63-84.
    11. Le Blanc, Gilles, 2000. "Regional Specialization, Local Externalities And Clustering In Information Technology Industries," ERSA conference papers ersa00p168, European Regional Science Association.
    12. Henderson, J. Vernon, 2003. "Marshall's scale economies," Journal of Urban Economics, Elsevier, vol. 53(1), pages 1-28, January.
    13. Hernandez-Sancho, Francesc & Soler-Marco, Vicent, 2002. "Technical efficiency and spatial externalities: evidence from spanish small and middle-sized industrial firms," ERSA conference papers ersa02p451, European Regional Science Association.
    14. Duranton, Gilles, 2002. "City size distributions as a consequence of the growth process," LSE Research Online Documents on Economics 20065, London School of Economics and Political Science, LSE Library.
    15. Patrick Bayer & Christopher Timmins, 2003. "A Note on the Equilibrium Properties of Locational Sorting Models," Working Papers 861, Economic Growth Center, Yale University.
    16. Rune Fitjar & Andrés Rodríguez-Pose, 2013. "The geographical dimension of innovation collaboration: Collaboration and innovation in Norway," ERSA conference papers ersa13p878, European Regional Science Association.
    17. David C. Maré, 2003. "Ideas for Growth?," Working Papers 03_19, Motu Economic and Public Policy Research.
    18. Henry Overman & Stephen Redding & Anthony J. Venables, 2001. "The Economic Geography of Trade, Production, and Income: A Survey of Empirics," CEP Discussion Papers dp0508, Centre for Economic Performance, LSE.
    19. An, Donghwan & Kim, Kwansoo & Kwon, Oh Sang, 2004. "The Demand- and Supply-Side Spillovers in the Food Manufacturing Industry in Korea: An Empirical Evidence from Both Local Level and Individual Firm Level," 2004 Annual meeting, August 1-4, Denver, CO 20238, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    20. Toshihiro Okubo, 2004. "Geographical Concentration, Comparative Advantage, and Public Policy," IHEID Working Papers 14-2004, Economics Section, The Graduate Institute of International Studies.
    21. J. Vernon Henderson, 2000. "The Effects of Urban Concentration on Economic Growth," NBER Working Papers 7503, National Bureau of Economic Research, Inc.
    22. Ergun Dogan, 2001. "External Scale Economies in Turkish Manufacturing Industries," International Review of Applied Economics, Taylor & Francis Journals, vol. 15(4), pages 429-446.
    23. Eliasson, Gunnar & Eliasson, Åsa, 2004. "The Theory of the Firm and the Markets for Strategic Acquisitions," Ratio Working Papers 44, The Ratio Institute.

    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:7358. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: http://edirc.repec.org/data/nberrus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.