Agglomeration Economies within IT-Producing and IT-Consuming Industries in U.S. Regions

Simon Condliffe (), William R. Latham, Christian Le Bas () and Frédéric Miribel
Additional contact information
Simon Condliffe: Department of Economics,West Chester University of Pennsylvania
Christian Le Bas: Department of Economics,University of Lyon

No 08-24, Working Papers from University of Delaware, Department of Economics

Abstract: This paper deals with the effects of the geographic concentration of economic activity on productivity through agglomeration economies in the U.S. economy. Our empirical study extends the literature on agglomeration economies in two directions. First we measure and compare the effects on productivity of geographic concentration in either information technology related activity (the IT sector) or in all other economic activities (the non-IT sector). Second we follow Jorgenson’s (2002) reasoning regarding the significance of the differences between IT-producing sectors and IT-using sectors and assess the differential effects of concentration in IT-producing sectors and concentration in IT-using sectors on productivity. We utilize four measures of agglomeration and analyze effects at two levels of geographic disaggregation: U.S. states and U.S. counties. We perform the analysis using a model drawn from the growth accounting literature in which total labor productivity in a region is the dependent variable. It is modeled as a function of the region’s capital-output ratio, the quality of the region’s labor supply as measured by the level of education, and an agglomeration variable measured by concentration in the IT or non-IT sectors or in the IT-producing or IT-using sectors. The cross section estimates for a single year yield mixed results. We find weak evidence in favor of an effect of concentration of IT activity on productivity at the state level. We find stronger effects on productivity at the county level from concentration in IT-producing sectors.

Keywords: Agglomeration Economies; Information Technology; Productivity (search for similar items in EconPapers)
JEL-codes: R11 O33 D24 D62 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eff, nep-geo, nep-ict and nep-ure
Date: 2008
View list of references

Downloads: (external link)
http://www.lerner.udel.edu/economics/WorkingPapers/2008/UDWP2008-24.pdf (application/pdf)

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: http://EconPapers.repec.org/RePEc:dlw:wpaper:08-24.

Access Statistics for this paper

More papers in Working Papers from University of Delaware, Department of Economics
Contact information at EDIRC.
Series data maintained by Saul Hoffman ().