Heterogeneous Agglomeration

Faggio, G., Silva, O. & Strange, W.C. (2017). Heterogeneous Agglomeration. Review of Economics and Statistics, 99(1), pp. 80-94. doi: 10.1162/REST_a_00604

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Abstract

Many prior treatments of agglomeration explicitly or implicitly assume that all industries agglomerate for the same reasons. This paper uses U.K. establishment-level coagglomeration data to document substantial heterogeneity across industries in the microfoundations of agglomeration economies. It finds robust evidence of organizational and adaptive agglomeration forces as discussed by Chinitz (1961), Vernon (1960), and Jacobs (1969). These forces interact with the traditional Marshallian (1890) factors of input sharing, labor pooling, and knowledge spillovers, establishing a previously unrecognized complementarity between the approaches of Marshall and Jacobs, as well as others, to the analysis of agglomeration.

Item Type: Article
Additional Information: © 2017 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology. This article, Faggio, G., Silva, O. & Strange, W.C. (2017). Heterogeneous Agglomeration. Review of Economics and Statistics, 99(1), pp. 80-94, has been published by Massachusetts Institute of Technology Press and can be accessed online at https://dx.doi.org/10.1162/REST_a_00604.
Subjects: H Social Sciences > HB Economic Theory
Divisions: School of Social Sciences > Department of Economics
URI: http://openaccess.city.ac.uk/id/eprint/16577

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