FIRM FORMATION AND INDUSTRIAL AGGLOMERATION UNDER MONOPOLISTIC COMPETITION - A STUDY ON GERMAN REGIONS

Stephan Brunow and Peter Nijkamp

Romanian Journal of Regional Science, 2019, vol. 13, issue 2, 1-25

Abstract: The presence of agglomeration economies tends to prompt a relocation and concentration of industries. It is also plausible that firm start-up activities reveal such effects. The present paper introduces an empirical testable model inspired by the New Economic Geography and human capital externalities literature. The novelty of this paper is that it derives a measure of agglomeration economies inspired by a microeconomic analysis, based on households’ and firms’ maximization behavior and reflected in the real market potential. Besides agglomeration forces, dispersion and human capital effects are separated and explicitly controlled for. This conceptual framework is empirically tested for German regions and industries. The paper sheds new light on the general mechanisms of intra-industrial agglomeration forces, as it explicitly considers the spatial distribution of economic activities. Our study provides clear evidence for the empirical significance and validy of the New Economic Geography.

Keywords: New Economic Geography; Agglomeration; Externalities; Firm Formation (search for similar items in EconPapers)
JEL-codes: L13 O41 R11 R3 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://rjrs.ase.ro/wp-content/uploads/2017/03/V132/V1321.Brunow.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: https://EconPapers.repec.org/RePEc:rrs:journl:v:13:y:2019:i:2:p:1-25

Access Statistics for this article

More articles in Romanian Journal of Regional Science from Romanian Regional Science Association
Bibliographic data for series maintained by Tibrea-Marcu Horatiu-Gabriel ().