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Assessing the Tendency of Spanish Manufacturing Industries to Cluster: Co-localization and Establishment Size

  • Marta R. Casanova

    ()

  • Vicente Orts

In this paper, we evaluate the spatial location patterns of Spanish manufacturing firms and we assess the different tendencies to cluster in each industry relative to the whole of manufacturing. To do this, we use a distance-based method (Marcon and Puech, 2003; Duranton and Overman, 2005), more concretely the Ripley’s K function, which measures concentration by counting the average number of neighbours of each firm within a circle of a given radius. This method allows us to treat space as continuous, analysing simultaneously multiple spatial scales and avoiding the shortcomings of the administrative scale. In addition, we employ a polygonal envelope to improve the delimitation of our area of study, substituting the rectangular shape used by other authors and thus avoiding the nuisance of empty spaces. We apply this method to Spanish manufacturing sectors at two-digit and four-digit level, isolating like this the different behaviours of spatial distribution of each subsector caused by 'spillovers' characteristic of each activity and also preventing compensation effects due to previous aggregation. Furthermore, we examine the co-localization between horizontally-linked and vertically-linked industries to assess the importance of these spillovers across industries and, finally, we try to answer what type of establishment, depending on its size, is the driver of the Spanish industrial agglomeration.

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Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa10p1227.

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Date of creation: Sep 2011
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Handle: RePEc:wiw:wiwrsa:ersa10p1227
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  1. Venables, Anthony J, 1995. "Economic Integration and the Location of Firms," American Economic Review, American Economic Association, vol. 85(2), pages 296-300, May.
  2. Marius Brülhart, 2001. "Evolving geographical concentration of European manufacturing industries," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 137(2), pages 215-243, June.
  3. Puga, Diego, 2001. "European Regional Policies in Light of Recent Location Theories," CEPR Discussion Papers 2767, C.E.P.R. Discussion Papers.
  4. Rosenthal, Stuart S. & Strange, William C., 2001. "The Determinants of Agglomeration," Journal of Urban Economics, Elsevier, vol. 50(2), pages 191-229, September.
  5. Eric Marcon & Florence Puech, 2003. "Evaluating the geographic concentration of industries using distance-based methods," Journal of Economic Geography, Oxford University Press, vol. 3(4), pages 409-428, October.
  6. Maurel, Francoise & Sedillot, Beatrice, 1999. "A measure of the geographic concentration in french manufacturing industries," Regional Science and Urban Economics, Elsevier, vol. 29(5), pages 575-604, September.
  7. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June.
  8. Michael Devereux & Rachel Griffith & Helen Simpson, 1999. "The geographic distribution of production activity in the UK," IFS Working Papers W99/26, Institute for Fiscal Studies.
  9. Glenn Ellison & Edward L. Glaeser, 1994. "Geographic Concentration in U.S. Manufacturing Industries: A Dartboard Approach," NBER Working Papers 4840, National Bureau of Economic Research, Inc.
  10. Marshall, Alfred, 1890. "The Principles of Economics," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number marshall1890.
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