Agglomeration Economies and Linkage Externalities in Urban Manufacturing Industries - A Case of Japanese Cities
Agglomeration economies are usually divided into two categories: urbanization economies and localization economies. In 80fs a number of attempts have been devoted to estimate urbanization economies and/or localization economies. After the work by Glaeser et al. in 1992, however, historical effects on agglomeration called dynamic externalities in agglomeration are tried to estimate extensively. These externalities are named as MAR in a dynamic sense, and traditional agglomeration economies are evaluated in static sense. Besides urbanization and localization, more traditional sources of industrial concentration are found in industrial linkages, such as customer and supplier linkages or backward and forward linkages. These linkage effects come from the concentration of different kinds of industries while localization economies mean the benefit from the concentration of firms within the same industry. Also, linkage effects are often referred as pecuniary externalities. This paper tries to construct an estimable model of linkage effects among industries as well as agglomeration economies, and to estimate these effects separately within a framework of the Translog production function. In this model intermediate inputs play an important role as linkage effects. The empirical analysis is based on two-digit data for manufacturing industries in Japanese cities. Estimated results vary significantly among the two-digit industries. Furthermore, in order to capture dynamic effect in changes of agglomeration, a time variant production function model which is consistent to static production function model is constructed and estimated. From the time series evidence we find agglomeration economies are decreasing while linkage effects are still important.
|Date of creation:||Aug 2005|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.ersa.org
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Henderson, J. Vernon, 1986. "Efficiency of resource usage and city size," Journal of Urban Economics, Elsevier, vol. 19(1), pages 47-70, January.
- Moomaw, Ronald L., 1983. "Is population scale a worthless surrogate for business agglomeration economies?," Regional Science and Urban Economics, Elsevier, vol. 13(4), pages 525-545, November.
- 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.
- Rosenthal, Stuart S. & Strange, William C., 2004. "Evidence on the nature and sources of agglomeration economies," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 49, pages 2119-2171 Elsevier.
- J. Vernon Henderson & Ari Kuncoro & Matthew Turner, 1992.
"Industrial Development in Cities,"
NBER Working Papers
4178, National Bureau of Economic Research, Inc.
- David L. Rigby & J¸rgen Essletzbichler, 2002. "Agglomeration economies and productivity differences in US cities," Journal of Economic Geography, Oxford University Press, vol. 2(4), pages 407-432, October.
- Nakamura, Ryohei, 1985. "Agglomeration economies in urban manufacturing industries: A case of Japanese cities," Journal of Urban Economics, Elsevier, vol. 17(1), pages 108-124, January.
- Cohen, Jeffrey P. & Paul, Catherine J. Morrison, 2005. "Agglomeration economies and industry location decisions: the impacts of spatial and industrial spillovers," Regional Science and Urban Economics, Elsevier, vol. 35(3), pages 215-237, May.
- Glaeser, Edward Ludwig & Kallal, Hedi D. & Scheinkman, Jose A. & Shleifer, Andrei, 1992.
"Growth in Cities,"
3451309, Harvard University Department of Economics.
- Sveikauskas, Leo A, 1975. "The Productivity of Cities," The Quarterly Journal of Economics, MIT Press, vol. 89(3), pages 393-413, August.
- Stuart S. Rosenthal & William C. Strange, 2003.
"Geography, Industrial Organization, and Agglomeration,"
The Review of Economics and Statistics,
MIT Press, vol. 85(2), pages 377-393, May.
- Stuart S. Rosenthal & William C. Strange, 2003. "Geography, Industrial Organization, and Agglomeration," Center for Policy Research Working Papers 56, Center for Policy Research, Maxwell School, Syracuse University.
- Stuart S. Rosenthal & William C. Strange, 1999. "Geography, Industrial Organization, and Agglomeration," Center for Policy Research Working Papers 14, Center for Policy Research, Maxwell School, Syracuse University.
- Gordon H. Hanson, 2000. "Scale Economies and the Geographic Concentration of Industry," NBER Working Papers 8013, National Bureau of Economic Research, Inc.
- Antonio Ciccone & Robert E. Hall, 1995.
"Productivity and the density of economic activity,"
Economics Working Papers
120, Department of Economics and Business, Universitat Pompeu Fabra.
- Eberts, Randall W. & McMillen, Daniel P., 1999.
"Agglomeration economies and urban public infrastructure,"
Handbook of Regional and Urban Economics,
in: P. C. Cheshire & E. S. Mills (ed.), Handbook of Regional and Urban Economics, edition 1, volume 3, chapter 38, pages 1455-1495
- Randall W. Eberts & Daniel P. McMillen, 1999. "Agglomeration Economies and Urban Public Infrastructure," Book chapters authored by Upjohn Institute researchers, in: Paul Cheshire & Edwin S. Mills (ed.), handbook or Regional and Urban Economics, volume 3, pages 1455-1495 W.E. Upjohn Institute for Employment Research.
- Goldstein, G. S. & Gronberg, T. J., 1984. "Economies of scope and economies of agglomeration," Journal of Urban Economics, Elsevier, vol. 16(1), pages 91-104, July.
- Midelfart-Knarvik, K.H. & Overman, H.G. & Venables, A.J., 2000.
"Comparative Advantage and Economic Geography: Estimating the Location of Production in the EU,"
18/00, Norwegian School of Economics and Business Administration-.
- Overman, Henry G & Ulltveit-Moe, Karen-Helene & Venables, Anthony J, 2000. "Comparative Advantage and Economic Geography: Estimating the Location of Production in the EU," CEPR Discussion Papers 2618, C.E.P.R. Discussion Papers.
- Bartelsman, Eric J & Caballero, Ricardo J & Lyons, Richard K, 1994. "Customer- and Supplier-Driven Externalities," American Economic Review, American Economic Association, vol. 84(4), pages 1075-84, September.
- John M. Quigley, 1998. "Urban Diversity and Economic Growth," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 127-138, Spring.
- Ciccone, Antonio, 2002.
"Agglomeration effects in Europe,"
European Economic Review,
Elsevier, vol. 46(2), pages 213-227, February.
- Knarvik, Karen Helene Midelfart & Steen, Frode, 1999.
" Self-Reinforcing Agglomerations? An Empirical Industry Study,"
Scandinavian Journal of Economics,
Wiley Blackwell, vol. 101(4), pages 515-32, December.
- Knarvik, K.H.M. & Steen, F., 1997. "Self-reinforcing Agglomerations? An empirical industry study," Papers 14/97, Norwegian School of Economics and Business Administration-.
- Krugman, Paul, 1998. "What's New about the New Economic Geography?," Oxford Review of Economic Policy, Oxford University Press, vol. 14(2), pages 7-17, Summer.
- Moomaw, Ronald L, 1981. "Productivity and City Size? A Critique of the Evidence [Are There Returns to Scale in City Size?]. [Bias in the Cross Section Estimates of the Elasticity of Substitution]," The Quarterly Journal of Economics, MIT Press, vol. 96(4), pages 675-88, November.
When requesting a correction, please mention this item's handle: RePEc:wiw:wiwrsa:ersa05p768. 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: (Gunther Maier)
If references are entirely missing, you can add them using this form.