Agglomeration Economies and Productivity Growth: U.S. Cities, 1880-1930

Alexander Klein () and Nicholas Crafts

Studies in Economics from School of Economics, University of Kent

Abstract: We investigate the role of industrial structure in labor productivity growth in U.S. cities between 1880 and 1930 using a new dataset constructed from the Census of Manufactures. We find that increases in specialization were associated with faster productivity growth but that diversity only had positive effects on productivity performance in large cities. We interpret our results as providing strong support for the importance of Marshallian externalities. Industrial specialization increased considerably in U.S. cities in the early 20th century, probably as a result of improved transportation, and we estimate that this resulted in significant gains in labor productivity.

Keywords: agglomeration economies; Jacobian externalities; manufacturing productivity; Marshallian externalities; industrial structure (search for similar items in EconPapers)
JEL-codes: N91 N92 R32 (search for similar items in EconPapers)
Date: 2015-06
New Economics Papers: this item is included in nep-eff, nep-geo, nep-gro, nep-his and nep-ure
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Working Paper: Agglomeration Economies and Productivity Growth: U.S. Cities, 1880-1930 (2015)
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