Spatial Concentration and Firm-Level Productivity in France

Philippe Martin, Thierry Mayer and Florian Mayneris ()

No 6858, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper analyzes empirically the effect of spatial agglomeration of activities on the productivity of firms using French individual firm data from 1996 to 2004. This allows us to control for endogeneity biases that the estimation of agglomeration economies typically encounters. French firms benefit from localization economies, but not from urbanization economies nor from competition effects. The benefits generated by increased sectoral clustering, though positive and highly significant are modest and geographically very limited. The gains from clusters are also quite well internalized by firms in their location choice: we find very little difference between the geography that would maximize productivity gains and the geography actually observed.

Keywords: clusters; localization economies; productivity; spatial concentration (search for similar items in EconPapers)
JEL-codes: C23 R10 R11 R12 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-eff, nep-geo and nep-ure
Date: Written 2008-06

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