Overcoming the MAUP: impact of agglomeration economies on regional performance in Germany

Andreas Behr, Christoph Schiwy and Lucy Hong

Applied Economics, 2025, vol. 57, issue 40, 6244-6257

Abstract: This study analyses the impact of agglomeration economies on employment growth at the individual firm and regional levels. The analysis is based on a sample of German firms, comprising a total of 134,081. We put forward a Modifiable Areal Unit Problem-free (MAUP-free) approach for the calculation of individual firm-specific agglomeration and local growth measures based on kernel density estimates. This enables us to examine the impact of agglomeration on firm and local growth within a continuous space framework. The econometric analysis demonstrates that the effects of agglomeration economies on firm and local growth are significantly disparate.

Date: 2025
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DOI: 10.1080/00036846.2024.2382933

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