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A different look at aglomeration effects in Spain

Author

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  • Martin-Barroso, David
  • Nuñez Serrano, Juan Andres
  • Velazquez, Francisco J.

Abstract

This paper explores the relationship between productivity and labour density at the municipality level for the Spanish economy and year 2001. Previous results on the mentioned relationship are confirrmed. Whilst agglomeration e¤ects at NUTs-3 level were important along the 1960s and 1970s, they seem to have disappeared along the second half of the 1980s. We show that agglomeration e¤ects are still present, nonetheless when analysed at a higher degree of geographical disaggregation. Recent amendments in regional governance and the creation of Comunidades Autónomas implying a higher degree of political and economic decentralization along the 1980s may have resulted in this change in agglomeration patterns. Endogeneity problems associated to estimation of productivity elasticities with respect to labour densities are taken into account by means of instrumental variable (IV) regressions. To this respect, elevation turns out to be a valid and attractive instrument for the agglomeration variable. Also we test if proximity to labour dense areas may also have a positive efect on the productivity level of a given municipality. The results show that agglomeration forces mainly operate within NUTs-3 regions the oldest administrative regional division of Spain.

Suggested Citation

  • Martin-Barroso, David & Nuñez Serrano, Juan Andres & Velazquez, Francisco J., 2010. "A different look at aglomeration effects in Spain," MPRA Paper 33601, University Library of Munich, Germany, revised 2010.
  • Handle: RePEc:pra:mprapa:33601
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    File URL: https://mpra.ub.uni-muenchen.de/33601/1/MPRA_paper_33601.pdf
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    References listed on IDEAS

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    Cited by:

    1. repec:spr:anresc:v:60:y:2018:i:1:d:10.1007_s00168-017-0849-y is not listed on IDEAS
    2. Gabor Bekes & Peter Harasztosi, 2015. "Grid and shake - Spatial aggregation and robustness of regionally estimated elasticities," IEHAS Discussion Papers 1526, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.

    More about this item

    Keywords

    Agglomeration; labour productivity; municipalities; IV estimation;

    JEL classification:

    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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