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Agglomerative Forces and Cluster Shapes

William Kerr () and Scott Kominers

No 16639, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We model spatial clusters of similar firms. Our model highlights how agglomerative forces lead to localized, individual connections among firms, while interaction costs generate a defined distance over which attraction forces operate. Overlapping firm interactions yield agglomeration clusters that are much larger than the underlying agglomerative forces themselves. Empirically, we demonstrate that our model's assumptions are present in the structure of technology and labor flows within Silicon Valley and its surrounding areas. Our model further identifies how the lengths over which agglomerative forces operate influence the shapes and sizes of industrial clusters; we confirm these predictions using variations across both technology clusters and industry agglomeration.

JEL-codes: J2 J6 L1 L2 L6 O3 R1 R3 (search for similar items in EconPapers)
Date: 2010-12
Note: IO LS PR
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Published as Kerr, William R., and Scott Duke Kominers. "Agglomerative Forces and Cluster Shapes." Review of Economics and Statistics 96, no. 3 (July 2014).

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Journal Article: Agglomerative Forces and Cluster Shapes (2015) Downloads
Working Paper: Agglomerative Forces and Cluster Shapes (2012) Downloads
Working Paper: Agglomerative Forces and Cluster Shapes (2012) Downloads
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