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Assessing the Localization Pattern of German Manufacturing & Service Industries - A Distance Based Approach

Hyun-Ju Koh () and Nadine Riedel ()
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Hyun-Ju Koh: University of Munich

No 913, Working Papers from Oxford University Centre for Business Taxation

Abstract: This paper assesses the agglomeration pattern of four-digit industries in Germany using a rich data set on the population of German firms. To identify geographical agglomeration, we follow the distance based approach of Duranton and Overman (2005) and find that the location pattern of 78% of our industries departs from randomness in the sense that firms exhibit significant geographical localization. In line with previous studies on manufacturing firms in the UK and France, our analysis suggests that especially traditional manufacturing industries exhibit strong localization patterns. Moreover, we find that geographical localization is not restricted to the manufacturing sector but that it plays an equally, or even more important role in service industries.

Keywords: Geographic concentration; agglomeration (search for similar items in EconPapers)
JEL-codes: R12 (search for similar items in EconPapers)
Date: 2009
New Economics Papers: this item is included in nep-cse, nep-eff, nep-geo and nep-ure
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