Spatial Density and Productivity – an analysis on one-by-one kilometer squares

Martin Andersson, Johan Klaesson and Johan P Larsson (johan.p.larsson@jibs.hj.se)
Additional contact information
Johan P Larsson: CENSE, Jönköping International Business School

No 255, Working Paper Series in Economics and Institutions of Innovation from Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies

Abstract: This paper reassesses the relationship between density and productivity by using detailed geo-coded data on wages and employment in Sweden. The contribution is empirical and builds on an analysis of spatial units of exactly the same size in terms of geographic surface. The data divide Sweden into areas of one square kilometer, and describe each area in terms of wages, worker characteristics and industry structure. Since the geographic areas are of constant size, the sheer number of employees in an area is an ‘exact’ measure of employment density. We find a significant relationship between density and productivity across squares. The estimated elasticity is in the 9-10 percent interval, and is insensitive to whether we employ a standard OLS estimator or a panel fixed effects estimator. Neighbor characteristics also matter in ways consistent with the idea of positive agglomeration externalities, where a location in a square with high density neighbors reflects proximity to (or a location in) a larger agglomeration. Moreover, the estimated relationship between productivity and density is insensitive to the chosen spatial scale.

Keywords: density; productivity; spatial dependence; geo-coded data; external scale economies; agglomeration externalities; Sweden; Modifiable Areal Unit Problem (MAUP) (search for similar items in EconPapers)
JEL-codes: C21 R11 R12 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2011-08-25
New Economics Papers: this item is included in nep-eff, nep-geo and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
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:hhs:cesisp:0255

Access Statistics for this paper

More papers in Working Paper Series in Economics and Institutions of Innovation from Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology, SE-100 44 Stockholm, Sweden. Contact information at EDIRC.
Bibliographic data for series maintained by Vardan Hovsepyan (vardan.hovsepyan@indek.kth.se).