What Causes Industry Agglomeration? Evidence from Coagglomeration Patterns Export

@article{ellisonetal07, abstract = {Author contact info: Glenn Ellison Department of Economics Massachusetts Institute of Technology 50 Memorial Drive, E52-380A Cambridge, MA 02142-1347 Tel: 617/253-8702 Fax: 617/253-1330 E-Mail: gellison@mit.edu Edward L. Glaeser Department of Economics 315A Littauer Center Harvard University Cambridge, MA 02138 Tel: 617/495-0575 Fax: 617/495-7730 E-Mail: eglaeser@harvard.edu William Kerr 3 Wheeler Road Lincoln, MA 01773 Tel: 617-496-7021 Fax: 617-495-3817 E-Mail: wkerr@hbs.edu Many industries are geographically concentrated. Many mechanisms that could account for such agglomeration have been proposed. We note that these theories make different predictions about which pairs of industries should be coagglomerated. We discuss the measurement of coagglomeration and use data from the Census Bureau's Longitudinal Research Database from 1972 to 1997 to compute pairwise coagglomeration measurements for U.S. manufacturing industries. Industry attributes are used to construct measures of the relevance of each of Marshall's three theories of industry agglomeration to each industry pair: (1) agglomeration saves transport costs by proximity to input suppliers or final consumers, (2) agglomeration allows for labor market pooling, and (3) agglomeration facilitates intellectual spillovers. We assess the importance of the theories via regressions of coagglomeration indices on these measures. Data on characteristics of corresponding industries in the United Kingdom are used as instruments. We find evidence to support each mechanism. Our results suggest that input-output dependencies are the most important factor, followed by labor pooling.}, author = {Ellison, Glenn and Glaeser, Edward L. and Kerr, William}, citeulike-article-id = {3387704}, citeulike-linkout-0 = {http://www.nber.org/papers/w13068}, citeulike-linkout-1 = {http://www.nber.org/papers/w13068.pdf}, journal = {National Bureau of Economic Research Working Paper Series}, keywords = {agglomeration, geography}, month = {April}, pages = {13068+}, posted-at = {2008-10-08 14:39:24}, priority = {2}, title = {What Causes Industry Agglomeration? Evidence from Coagglomeration Patterns}, url = {http://www.nber.org/papers/w13068}, year = {2007} }

TY - JOUR ID - ellisonetal07 L3 - citeulike-article-id:3387704 N2 - Author contact info: Glenn Ellison Department of Economics Massachusetts Institute of Technology 50 Memorial Drive, E52-380A Cambridge, MA 02142-1347 Tel: 617/253-8702 Fax: 617/253-1330 E-Mail: gellison@mit.edu Edward L. Glaeser Department of Economics 315A Littauer Center Harvard University Cambridge, MA 02138 Tel: 617/495-0575 Fax: 617/495-7730 E-Mail: eglaeser@harvard.edu William Kerr 3 Wheeler Road Lincoln, MA 01773 Tel: 617-496-7021 Fax: 617-495-3817 E-Mail: wkerr@hbs.edu Many industries are geographically concentrated. Many mechanisms that could account for such agglomeration have been proposed. We note that these theories make different predictions about which pairs of industries should be coagglomerated. We discuss the measurement of coagglomeration and use data from the Census Bureau's Longitudinal Research Database from 1972 to 1997 to compute pairwise coagglomeration measurements for U.S. manufacturing industries. Industry attributes are used to construct measures of the relevance of each of Marshall's three theories of industry agglomeration to each industry pair: (1) agglomeration saves transport costs by proximity to input suppliers or final consumers, (2) agglomeration allows for labor market pooling, and (3) agglomeration facilitates intellectual spillovers. We assess the importance of the theories via regressions of coagglomeration indices on these measures. Data on characteristics of corresponding industries in the United Kingdom are used as instruments. We find evidence to support each mechanism. Our results suggest that input-output dependencies are the most important factor, followed by labor pooling. JF - National Bureau of Economic Research Working Paper Series TI - What Causes Industry Agglomeration? Evidence from Coagglomeration Patterns SP - 13068 KW - agglomeration KW - geography AU - Ellison, Glenn AU - Glaeser, Edward AU - Kerr, William PY - 2007/April// UR - http://www.nber.org/papers/w13068 ER -