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How important is geography for agglomeration?

  • Roos, Michael

    ()

The economic geography literature distinguishes between two types of reasons for economic agglomeration. Regional concentration of economic activity can be attributed to 'first nature' meaning geographic advantages and disadvantages given by nature or to 'second nature' meaning agglomeration economies by the interaction of economic agents. Several recent studies tried to estimate the relative importance of the two types of explanation. Most of these studies seem to exaggerate the importance of natural advantages because of loose definitions of geography. We describe geography by a small set of non-economic variables and estimate their importance for agglomeration in Germany. We find that about one third of the agglomeration of economic activity can be attributed to geography.

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File URL: http://www-sre.wu-wien.ac.at/ersa/ersaconfs/ersa02/cd-rom/papers/517.pdf
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Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa02p517.

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Date of creation: Aug 2002
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Handle: RePEc:wiw:wiwrsa:ersa02p517
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  1. Alberto F. Ades & Edward L. Glaeser, 1994. "Trade and Circuses: Explaining Urban Giants," NBER Working Papers 4715, National Bureau of Economic Research, Inc.
  2. McCallum, John, 1995. "National Borders Matter: Canada-U.S. Regional Trade Patterns," American Economic Review, American Economic Association, vol. 85(3), pages 615-23, June.
  3. Edward L. Glaeser & Glenn Ellison, 1999. "The Geographic Concentration of Industry: Does Natural Advantage Explain Agglomeration?," American Economic Review, American Economic Association, vol. 89(2), pages 311-316, May.
  4. Paul R. Krugman, 1991. "First Nature, Second Nature, and Metropolitan Location," NBER Working Papers 3740, National Bureau of Economic Research, Inc.
  5. Ellison, G. & Glaeser, E.L., 1994. "Geographic Concentration in U.S. Manufacturing Industries: A Dartboard Approach," Working papers 94-27, Massachusetts Institute of Technology (MIT), Department of Economics.
  6. Masahisa Fujita & Paul Krugman & Anthony J. Venables, 2001. "The Spatial Economy: Cities, Regions, and International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262561476, June.
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