Concentration, agglomeration and the size of plants

Miren Lafourcade and Giordano Mion

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This paper investigates whether the geographic distribution of manufacturing activities depends on the size of plants. Using Italian data, we find, as in Kim [Kim, S., 1995. Expansion of markets and the geographic concentration of economic activities: the trends in U.S. regional manufacturing structure, 1860–1987, Quarterly Journal of Economics 110 (4), 881–908.], Holmes and Stevens [Holmes, T.J., and Stevens, J.J., 2002. Geographic concentration and establishment scale, Review of Economics and Statistics 84, 682–690.], and Holmes and Stevens [Holmes, T.J. and Stevens, J.J., 2004. Spatial distribution of economic activities in North America, in: J.V. Henderson and J.F. Thisse, eds., Handbook of Regional and Urban Economics, Vol.4, (Elsevier-North Holland, Amsterdam).], that large plants are more concentrated than small plants. However, considering distance-based patterns via spatial auto-correlation, we find that small establishments actually exhibit a greater tendency to be located in adjacent areas. These apparently contradictory findings raise a measurement issue regarding co-location externalities and suggest that large plants are more likely to cluster within narrow geographical units (concentration), while small establishments would rather co-locate within wider distance-based clusters (agglomeration). This picture is consistent with different size plants engaging in different transport-intensive activities.

Keywords: Concentration; spatial auto-correlation; heterogeneous firms (search for similar items in EconPapers)
JEL-codes: C21 L11 R12 R30 R34 (search for similar items in EconPapers)
Date: 2007-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (31)

Published in Regional Science and Urban Economics, January, 2007, 37(1), pp. 46-68. ISSN: 0166-0462

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Related works:
Journal Article: Concentration, agglomeration and the size of plants (2007)
Working Paper: Concentration, agglomeration and the size of plants (2007)
Working Paper: Concentration, agglomeration and the size of plants (2007)
Working Paper: Concentration, Agglomeration and the Size of Plants (2007)
Working Paper: Concentration, agglomeration and the size of plants (2007)
Working Paper: Concentration, Agglomeration and the Size of Plants (2007)
Working Paper: Concentration, agglomeration and the size of plants (2005)
Working Paper: Concentration, agglomeration and the size of plants (2005)
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