Long-term processes of regional concentration and dispersion - fuzzy evidence for Western Germany
The description of geographical concentration and the search for its causes is at the focus of many studies. However, by not considering developments over an extended period of time, the majority of the studies mainly examine static relationships. This paper aims at filling this gap. We measure concentration in Western Germany for the time period from 1986 to 2006 with the Ellison-Glaeser index (EGI). In order to account for concentration processes at various levels, we investigate the long-run development of the EGI for NUTS3-regions and labour-market regions as well as for 43 two-digit-industries and 191 three-digit-industries. The Establishment History Panel provides detailed information about employment at the level of individual firms. The major part of the industries exhibits a larger degree of geographical concentration than one may expect when location decisions of firms are purely stochastic. This result holds true throughout our observation period irrespective of the applied spatial and industrial levels. Thus, regional concentration matters for about two thirds of all industries in Western Germany. However, despite concentration being significant, the value of the EGI is rather low for most of these industries. Since the mid 1980s, the shares of strongly localized and non-localized industries have been declining and increasing, respectively. Hence, dynamic changes of the industry-specific regional structure of economic activities have taken place at the lower and upper tails of the EGI distribution. A more detailed analysis of EGI rankings and changes is carried out for ten industry groups. All in all, sectoral shifts affect changes in industry-specific regional patterns. This holds true for old shrinking and stagnating industries and as well as for dynamic high-tech-manufacturing industries and business-related human-capital service industries. To confirm the descriptive findings in a multivariate setting, an econometric analysis is carried out. Using a multinomial logit model, we examine which forces lead to an increase, decrease or unchanged state of geographical concentration. Again, we find evidence that agglomeration externalities in old industries seem to have lost their importance. At the same time, the high-technology industries have not localized strongly enough to compensate for this effect.
|Date of creation:||Sep 2011|
|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.:
- Karl Aiginger & Michael Pfaffermayr, 2004. "The Single Market and Geographic Concentration in Europe," Review of International Economics, Wiley Blackwell, vol. 12(1), pages 1-11, 02.
- Beaudry, Catherine & Schiffauerova, Andrea, 2009. "Who's right, Marshall or Jacobs? The localization versus urbanization debate," Research Policy, Elsevier, vol. 38(2), pages 318-337, March.
- Michael Peneder, 2002. "special issue: Intangible investment and human resources," Journal of Evolutionary Economics, Springer, vol. 12(1), pages 107-134.
- Glaeser, Edward L., 2008. "Cities, Agglomeration, and Spatial Equilibrium," OUP Catalogue, Oxford University Press, number 9780199290444.
- Mary Amiti, 1997.
"Specialisation Patterns in Europe,"
CEP Discussion Papers
dp0363, Centre for Economic Performance, LSE.
- Mary Amiti, 1999. "Specialization patterns in Europe," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 135(4), pages 573-593, December.
- Devereux, Michael P. & Griffith, Rachel & Simpson, Helen, 2002.
"The Geographical Distribution of Production Activity in the UK,"
CEPR Discussion Papers
3627, C.E.P.R. Discussion Papers.
- Devereux, Michael P. & Griffith, Rachel & Simpson, Helen, 2004. "The geographic distribution of production activity in the UK," Regional Science and Urban Economics, Elsevier, vol. 34(5), pages 533-564, September.
- 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.
- Michael P. Devereux & Rachel Griffith & Helen Simpson, 2000. "The Geographic Distribution of Production Activity in the UK," Econometric Society World Congress 2000 Contributed Papers 1397, Econometric Society.
- 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.
- 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.
- 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.
- Haaland, Jan I. & Kind, Hans Jarle & Ulltveit-Moe, Karen-Helene, 1999.
"What Determines the Economic Geography of Europe?,"
CEPR Discussion Papers
2072, C.E.P.R. Discussion Papers.
- Guy Dumais & Glenn Ellison & Edward Glaeser, 1997.
"Geographic Concentration as a Dynamic Process,"
NBER Working Papers
6270, National Bureau of Economic Research, Inc.
- Francesca Mameli & Alessandra Faggian & Philip McCann, 2008. "Employment Growth in Italian Local Labour Systems: Issues of Model Specification and Sectoral Aggregation," Spatial Economic Analysis, Taylor & Francis Journals, vol. 3(3), pages 343-360.
- 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.
- Romer, Paul M, 1986.
"Increasing Returns and Long-run Growth,"
Journal of Political Economy,
University of Chicago Press, vol. 94(5), pages 1002-37, October.
- repec:kas:wpaper:2006-81 is not listed on IDEAS
- Paul M Romer, 1999.
"Endogenous Technological Change,"
Levine's Working Paper Archive
2135, David K. Levine.
- Lu, Jiangyong & Tao, Zhigang, 2009.
"Trends and determinants of China's industrial agglomeration,"
Journal of Urban Economics,
Elsevier, vol. 65(2), pages 167-180, March.
- Lu, Jiangyong & Tao, Zhigang, 2007. "Trends and Determinants of China’s Industrial Agglomeration," MPRA Paper 6597, University Library of Munich, Germany.
- Luisito Bertinelli & Jehan Decrop, 2005. "Geographical agglomeration: Ellison and Glaeser's index applied to the case of Belgian manufacturing industry," Regional Studies, Taylor & Francis Journals, vol. 39(5), pages 567-583.
- Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
- Anne Leahy & Alfons Palangkaraya & Jongsay Yong, 2007.
"Geographical Agglomeration in Australian Manufacturing,"
Melbourne Institute Working Paper Series
wp2007n11, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
- Anne Leahy & Alfons Palangkaraya & Jongsay Yong, 2010. "Geographical Agglomeration in Australian Manufacturing," Regional Studies, Taylor & Francis Journals, vol. 44(3), pages 299-314.
- Bjoern Alecke & Gerhard Untiedt, 2006. "Die geografische Konzentration von Industrie und Dienstleistungen in Deutschland. Neue empirische Evidenz mittels des Ellison-Glaeser-Index," Working Papers 2-2006, GEFRA - Gesellschaft fuer Finanz- und Regionalanalysen.
- Björn Alecke & Christoph Alsleben & Frank Scharr & Gerhard Untiedt, 2006. "Are there really high-tech clusters? The geographic concentration of German manufacturing industries and its determinants," The Annals of Regional Science, Springer, vol. 40(1), pages 19-42, March.
- Eckhardt Bode, 1999. "Localized Knowledge Spillovers and Regional Employment Growth: Evidence from Germany," Kiel Working Papers 938, Kiel Institute for the World Economy.
- Klepper, Steven, 1997. "Industry Life Cycles," Industrial and Corporate Change, Oxford University Press, vol. 6(1), pages 145-81.
- Tibor Scitovsky, 1954. "Two Concepts of External Economies," Journal of Political Economy, University of Chicago Press, vol. 62, pages 143.
- 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.
- Midelfart-Knarvik, K.H. & Overman, H.G. & Venables, A.J., 2000. "Comparative Advantage and Economic Geography: Estimating the Location of Production in the EU," Papers 18/00, Norwegian School of Economics and Business Administration-.
- Michael E. Porter, 2000. "Location, Competition, and Economic Development: Local Clusters in a Global Economy," Economic Development Quarterly, , vol. 14(1), pages 15-34, February.
When requesting a correction, please mention this item's handle: RePEc:wiw:wiwrsa:ersa10p537. 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.