The productivity advantages of large cities: Distinguishing agglomeration from firm selection

Gilles Duranton, Pierre-Philippe Combes, Diego Puga, Laurent Gobillon and Sébastien Roux ()

No 7191, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Firms are more productive on average in larger cities. Two explanations have been offered: agglomeration economies (larger cities promote interactions that increase productivity) and firm selection (larger cities toughen competition allowing only the most productive to survive). To distinguish between them, we nest a generalised version of a seminal firm selection model and a standard model of agglomeration. Stronger selection in larger cities left-truncates the productivity distribution whereas stronger agglomeration right-shifts and dilates the distribution. We assess the relative importance of agglomeration and firm selection using French establishment-level data and a new quantile approach. Spatial productivity differences in France are mostly explained by agglomeration.

Keywords: Agglomeration; Cities; Firm selection; Productivity (search for similar items in EconPapers)
JEL-codes: C52 D24 R12 (search for similar items in EconPapers)
Date: 2009-03
New Economics Papers: this item is included in nep-eff, nep-geo and nep-ure
References: Add references at CitEc
Citations: View citations in EconPapers (77)

Downloads: (external link)
https://cepr.org/publications/DP7191 (application/pdf)

Related works:
Journal Article: The Productivity Advantages of Large Cities: Distinguishing Agglomeration From Firm Selection (2012)
Working Paper: The productivity advantages of large cities: distingushing agglomeration from firm selection (2012)
Working Paper: The productivity advantages of large cities: distingushing agglomeration from firm selection (2012)
Working Paper: The Productivity Advantages of Large Cities: Distinguishing Agglomeration from Firm Selection (2012)
Working Paper: The productivity advantages of large cities: Distinguishing agglomeration from firm selection (2010)
Working Paper: The Productivity Advantages of Large Cities: Distinguishing Agglomeration from Firm Selection (2009)
Working Paper: The Productivity Advantages of Large Cities: Distinguishing Agglomeration from Firm Selection (2009)
Working Paper: The productivity advantages of large cities: Distinguishing agglomeration from firm selection (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:7191

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP7191

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().