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Is there a limit to agglomeration? Evidence from productivity of Dutch firms

  • Marian Rizov


Abstract We compute aggregate productivity of three categories of regions, classified by level of urbanization in the Netherlands, from firm-specific total factor productivity (TFP) measures. TFP measures are estimated by a semi-parametric algorithm, within 2-digit industries, covering agriculture, manufacturing, construction, trade and services, using AMADEUS data over the period 1997-2006. We analyse the productivity differentials across urbanization categories by decomposing them into industry productivity effect and industry composition effect. Our analysis indicates that there is non-linear, inverted U-shape effect of agglomeration on productivity growth but in levels agglomeration is associated with higher productivity.

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Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa11p231.

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Date of creation: Sep 2011
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Handle: RePEc:wiw:wiwrsa:ersa11p231
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