How Densely Do Manufacturing Establishments Occupy Land?

Kristian Behrens, Florian Mayneris and Theophile Ndjanmou Bieda

No 17749, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We construct a dataset on the size of parcels and on the footprint of buildings occupied by manufacturing establishments in Canada. We find that establishments in big cities and close to city centers occupy their parcels more densely, both in terms of employment and building footprint. Moreover, establishments with more employees use less land per worker. These facts cannot be rationalized by a Cobb-Douglas production function featuring land and labor as production factors. They are, however, consistent with a modified-CES production function in which land has a fixed cost component. The calibrated elasticity of substitution between land—as measured by parcel size—and labor is low (between 0.2 and 0.4).

Keywords: Land use; Land and production; Production function; Geo-referenced data; Building and parcel polygons; Manufacturing (search for similar items in EconPapers)
JEL-codes: L60 R14 R32 (search for similar items in EconPapers)
Date: 2022-12
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