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The Productive City Needs both - localization and urbanization economies across spatial scales in the city

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Listed:
  • Martin Andersson
  • Johan P Larsson
  • Joakim Lundblad

Abstract

This paper revisits a classical inquiry by addressing the question of localization and urbanization economies. We propose that specialization and diversity may offer externalities operating at different spatial scales. Using high-resolution geo-coded plant-level panel data for Swedish cities allowing us to observe neighborhoods of 1 km2, we estimate a firm-level production function to show that close proximity to employment density in the own industry, as well as city-wide diversity, positively contribute to productivity of firms. While localization economies appear to be bound to the immediate neighborhood level within cities, urbanization grow stronger at larger spatial scales. These results provide some support for that urbanization economies and localization economies not only co-exist but also co-depend.

Suggested Citation

  • Martin Andersson & Johan P Larsson & Joakim Lundblad, 2015. "The Productive City Needs both - localization and urbanization economies across spatial scales in the city," ERSA conference papers ersa15p385, European Regional Science Association.
    • Handle: RePEc:wiw:wiwrsa:ersa15p385
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    References listed on IDEAS

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    1. Stuart Donovan & Thomas de Graaff & Henri L. F. de Groot & Carl C. Koopmans, 2024. "Unraveling urban advantages—A meta‐analysis of agglomeration economies," Journal of Economic Surveys, Wiley Blackwell, vol. 38(1), pages 168-200, February.

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    More about this item

    Keywords

    specialization; diversity; productivity; neighborhood; attenuation; externalities;
    All these keywords.

    JEL classification:

    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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