What Causes Industry Agglomeration? Evidence from Coagglomeration Patterns

William Kerr, Edward Glaeser and Glenn Ellison ()

Working Papers from U.S. Census Bureau, Center for Economic Studies

Abstract: 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.

Pages: 42 pages
Date: 2007-04
New Economics Papers: this item is included in nep-geo and nep-ure
References: Add references at CitEc
Citations: View citations in EconPapers (86)

Downloads: (external link)
https://www2.census.gov/ces/wp/2007/CES-WP-07-13.pdf First version, 2007 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 403 Forbidden

Related works:
Journal Article: What Causes Industry Agglomeration? Evidence from Coagglomeration Patterns (2010)
Working Paper: What Causes Industry Agglomeration? Evidence from Coagglomeration Patterns (2007)
Working Paper: What Causes Industry Agglomeration? Evidence from Coagglomeration Patterns (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cen:wpaper:07-13

Access Statistics for this paper

More papers in Working Papers from U.S. Census Bureau, Center for Economic Studies Contact information at EDIRC.
Bibliographic data for series maintained by Dawn Anderson ().