Uncovering the Urban Advantage of Australian Firms: New Evidence from BLADE Data

Antonio Bellofatto, Begoña Domínguez and Elyse C. Dwyer
Authors registered in the RePEc Author Service: Begoña Domínguez

CAMA Working Papers from Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University

Abstract: This paper quantifies the productivity advantages of urban firms within and across Australian states and industries. Following Combes et al. (2012), we decompose the source of urban advantages into agglomeration and selection effects using the most exhaustive data source on Australian businesses: BLADE. Our findings show that most of the urban productivity advantages are due to agglomeration effects and that these advantages differ substantially across Australian states. They range from 10% in WA to 1.5% in SA in terms of relative urban productivity gains for a representative firm with mean productivity. These advantages also vary across industries: they are twice as large for manufacturing firms in QLD (5.1%) vs NSW (2.4%) while nearly three times as large for service firms in NSW (11.7%) vs QLD (4.1%). Urban advantages are concentrated among mature firms, and among high-productivity businesses within young firms.

Keywords: Agglomeration; Productivity Advantages; Regional vs Urban; Selection; Firms (search for similar items in EconPapers)
JEL-codes: C81 D24 E24 H77 O4 R3 R5 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2022-08
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Persistent link: https://EconPapers.repec.org/RePEc:een:camaaa:2022-47

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