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Measuring Industry Agglomeration and Identifying the Driving Forces

Listed author(s):
  • Howard, Emma
  • Newman, Carol
  • Tarp, Finn

Understanding industry agglomeration and its driving forces is critical for the formulation of industrial policy in developing countries. Crucial to this process is the definition and measurement of agglomeration. We propose a new measure and examine what it reveals about the importance of transport costs, labour market pooling, and technology transfer for agglomeration processes. We contrast this analysis with insights from existing measures in the literature and find very different underlying stories at work. An exceptionally rich set of data from Vietnam makes us confident that our measure is superior at least in developing country contexts.

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File URL: https://www.wider.unu.edu/sites/default/files/wp2012-084.pdf
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Paper provided by World Institute for Development Economic Research (UNU-WIDER) in its series Working Paper Series with number UNU-WIDER Research Paper WP2012/084.

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Length: 30
Date of creation: 2012
Handle: RePEc:unu:wpaper:wp2012-84
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  1. Pierre-Philippe Combes & Gilles Duranton, 2001. "Labor Pooling, Labor Poaching and Spatial Clustering," CEP Discussion Papers dp0510, Centre for Economic Performance, LSE.
  2. William Kerr & Edward Glaeser & Glenn Ellison, 2007. "What Causes Industry Agglomeration? Evidence from Coagglomeration Patterns," Working Papers 07-13, Center for Economic Studies, U.S. Census Bureau.
  3. 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.
  4. Paul Krugman & Anthony J. Venables, 1995. "Globalization and the Inequality of Nations," The Quarterly Journal of Economics, Oxford University Press, vol. 110(4), pages 857-880.
  5. Hoyt Bleakley & Jeffrey Lin, 2011. "Portage and path dependence," Working Papers 11-38, Federal Reserve Bank of Philadelphia.
  6. James R. Markusen & Anthony J. Venables, 1997. "Foreign Direct Investment as a Catalyst for Industrial Development," NBER Working Papers 6241, National Bureau of Economic Research, Inc.
  7. John S. Felkner & Robert M. Townsend, 2011. "The Geographic Concentration of Enterprise in Developing Countries," The Quarterly Journal of Economics, Oxford University Press, vol. 126(4), pages 2005-2061.
  8. Pagan, Adrian, 1984. "Econometric Issues in the Analysis of Regressions with Generated Regressors," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 25(1), pages 221-247, February.
  9. Marcy Burchfield & Henry G. Overman & Diego Puga & Matthew A. Turner, 2006. "Causes of Sprawl: A Portrait from Space," The Quarterly Journal of Economics, Oxford University Press, vol. 121(2), pages 587-633.
  10. Ellison, Glenn & Glaeser, Edward L, 1997. "Geographic Concentration in U.S. Manufacturing Industries: A Dartboard Approach," Journal of Political Economy, University of Chicago Press, vol. 105(5), pages 889-927, October.
  11. Duranton, Gilles & Henry G Overman, 2003. "Testing for Localisation Using Micro-Geographic Data," Royal Economic Society Annual Conference 2003 69, Royal Economic Society.
  12. Hoyt Bleakley & Jeffrey Lin, 2010. "Portage: Path Dependence and Increasing Returns in U.S. History," NBER Working Papers 16314, National Bureau of Economic Research, Inc.
  13. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
  14. repec:hhs:iuiwop:430 is not listed on IDEAS
  15. Helsley, Robert W. & Strange, William C., 1990. "Matching and agglomeration economies in a system of cities," Regional Science and Urban Economics, Elsevier, vol. 20(2), pages 189-212, September.
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