The Role of Cities: Evidence From the Placement of Sales Offices

Thomas Holmes ()

Working Papers from U.S. Census Bureau, Center for Economic Studies

Abstract: What is the force of attraction of cities? Leading explanations include the advantages of a con-centrated market and knowledge spillovers. This paper develops a model of firm location decisions in which it is possible to distinguish the importance of the concentrated-market motive from other motives, including knowledge spillovers. A key aspect of the model is that it allows for the firm to choose multiple locations. The theory is applied to study the placement of manufacturing sales offices. The implications of the concentrated-market motive are found to be a salient feature of U.S. Census micro data. The structural parameters of the model are estimated. The concentrated-market motive is found to account for approximately half of the concentration of sales offices in large cities.

Keywords: CES; economic; research; micro; data; microdata; chief; economist (search for similar items in EconPapers)
Date: 2002-01
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Citations: View citations in EconPapers (5)

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Working Paper: The role of cities: evidence from the placement of sales offices (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:cen:wpaper:02-02

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