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The scope of agglomeration economies: Evidence from Catalonia

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  • Jordi Jofre‐Monseny

Abstract

This paper is an empirical study of the geographic and industrial scope of agglomeration economies. We also explore if small establishments make better neighbours than their larger counterparts. We address these issues by studying the effects of local industrial characteristics on the location decisions of new establishments using the random profit maximization framework. We carry out separate econometric estimations for seven industries in Catalonia, a Spanish region, using data from 1995–2002. Agglomeration economies seem to work at a very local level. Evidence of localization, urbanization and diversity effects is found. There is no strong evidence that establishments prefer to be located near to small rather than large establishments. Resumen Este artículo es un estudio empírico del alcance geográfico e industrial de las economías de aglomeración. Exploramos también si los establecimientos más pequeños constituyen mejores vecinos que sus contrapartes de mayor tamaño. Tratamos estos asuntos estudiando los efectos de las características de la industria local en las decisiones de localización de nuevos establecimientos utilizando el marco de maximización aleatoria de beneficios. Realizamos estimaciones econométricas por separado para siete industrias en Cataluña, una región española, utilizando datos de 1995–2002. Las economías de aglomeración parecen funcionar a escala muy local. Se encontraron pruebas de localización, urbanización y efectos de diversidad. No hay pruebas firmes de que los establecimientos prefieren ubicarse cerca de establecimientos pequeños, en vez de grandes.

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  • Jordi Jofre‐Monseny, 2009. "The scope of agglomeration economies: Evidence from Catalonia," Papers in Regional Science, Wiley Blackwell, vol. 88(3), pages 575-590, August.
    • Handle: RePEc:bla:presci:v:88:y:2009:i:3:p:575-590
    DOI: 10.1111/j.1435-5957.2009.00226.x
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    2. Josep-Maria Arauzo-Carod & Miguel Manjón-Antolín, 2012. "(Optimal) spatial aggregation in the determinants of industrial location," Small Business Economics, Springer, vol. 39(3), pages 645-658, October.
    3. Jordi Jofre-Monseny & Raquel Marín-López & Elisabet Viladecans-Marsal, 2012. "What underlies localization and urbanization economies? Evidence from the location of new firms," Working Papers 2012/9, Institut d'Economia de Barcelona (IEB).
    4. Jordi Jofre-Monseny & Raquel Marín-López & Elisabet Viladecans-Marsal, 2014. "The Determinants Of Localization And Urbanization Economies: Evidence From The Location Of New Firms In Spain," Journal of Regional Science, Wiley Blackwell, vol. 54(2), pages 313-337, March.
    5. Jordi Jofre-Monseny, 2010. "Is agglomeration taxable?," Working Papers 2010/15, Institut d'Economia de Barcelona (IEB).
    6. Jofre-Monseny, Jordi & Marín-López, Raquel & Viladecans-Marsal, Elisabet, 2011. "The mechanisms of agglomeration: Evidence from the effect of inter-industry relations on the location of new firms," Journal of Urban Economics, Elsevier, vol. 70(2), pages 61-74.
    7. Jordi Jofre-Monseny & Maria Sánchez-Vidal & Elisabet Viladecans-Marsal, 2018. "Big plant closures and local employment," Journal of Economic Geography, Oxford University Press, vol. 18(1), pages 163-186.
    8. Rosa Sanchis-Guarner, 2012. "Driving Up Wages: The Effects of Road Construction in Great Britain," SERC Discussion Papers 0120, Centre for Economic Performance, LSE.
    9. Koh, Hyun-Ju & Riedel, Nadine & Böhm, Tobias, 2013. "Do governments tax agglomeration rents?," Journal of Urban Economics, Elsevier, vol. 75(C), pages 92-106.
    10. Jordi Jofri-Monseny & Maria Sánchez-Vidal & Elisabet Viladecans-Marsal, 2015. "Big Plant Closures and Agglomeration Economies," SERC Discussion Papers 0179, Centre for Economic Performance, LSE.
    11. Koh, Hyun-Ju & Riedel, Nadine & Böhm, Tobias, 2013. "Do governments tax agglomeration rents?," Journal of Urban Economics, Elsevier, vol. 75(C), pages 92-106.
    12. Hyun-Ju Koh & Nadine Riedel, 2010. "Do governments tax agglomeration rents?," Working Papers 2010/21, Institut d'Economia de Barcelona (IEB).
    13. Jonathan Jones, 2017. "Agglomeration economies and the location of foreign direct investment: A meta-analysis," Journal of Regional Science, Wiley Blackwell, vol. 57(5), pages 731-757, November.
    14. Jofre-Monseny, Jordi & Solé-Ollé, Albert, 2012. "Which communities should be afraid of mobility? The effects of agglomeration economies on the sensitivity of employment location to local taxes," Regional Science and Urban Economics, Elsevier, vol. 42(1-2), pages 257-268.
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    16. Jordi Jofre-Monseny, 2010. "Is agglomeration taxable?," Working Papers 2010/15, Institut d'Economia de Barcelona (IEB).

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