Input-output linkages, proximity to final demand and the location of manufacturing industries

Giordano Mion

No 2004053, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: In this paper I develop an empirical framework to estimate the role of agglomeration externalities, especially those stemming from input-output linkages, in the location process of US manufacturing plants. Furthermore, drawing on the model of Holmesand Stevens (2004b), I propose a way to reconciliate some previous puzzling results about proximity to consumers' demand and the scope of agglomeration forces. Results suggest that intermediate flows have a positive impact, especially for big plants, on local specialization. By contrast, consumers' demand has a negative effect and this result is consistent with the model of Holmes and Stevens (2004b). However, the majority of both effects comes from very local interactions, with spatial spill-oversbeing quite weak, but with a very large geographical scope. This result suggests some kind of strong non-linearity in the underlying spatial process. While, very close interactions are extremely important, when considering what is beyond the limit of local markets then distance does not matter so much.

Keywords: manufacturing concentration; input-output linkages; agglomeration externalities; market proximity (search for similar items in EconPapers)
JEL-codes: L60 R12 R15 R31 R34 (search for similar items in EconPapers)
Date: 2004-07
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Chapter: Input–Output Linkages, Proximity to Final Demand and the Location of Manufacturing Industries (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:2004053

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