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Vertical disintegration in Marshallian industrial districts

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  • Figueiredo, Octávio
  • Guimarães, Paulo
  • Woodward, Douglas

Abstract

This paper uses a novel approach and detailed plant-level Portuguese data to reexamine the Marshallian hypothesis that specialization and the vertical disintegration of firms should be greater in areas where an industry concentrates. Our measure of firm specialization and vertical disintegration employs a Herfindhal index constructed with occupational shares for all workers within the firm. Controlling for firm size and sector of activity, we find that vertical disintegration is higher in areas where industries agglomerate. Sensitivity tests reveal that this positive relation is remarkably robust across different specifications.

Suggested Citation

  • Figueiredo, Octávio & Guimarães, Paulo & Woodward, Douglas, 2010. "Vertical disintegration in Marshallian industrial districts," Regional Science and Urban Economics, Elsevier, vol. 40(1), pages 73-78, January.
    • Handle: RePEc:eee:regeco:v:40:y:2010:i:1:p:73-78
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    Cited by:

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    2. Isabel Diez-Vial & Emilio Alvarez-Suescun, 2010. "Geographical Agglomeration as an Alternative to Vertical Integration," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 36(4), pages 373-389, June.
    3. Alexandre Almeida & Aurora A.C. Teixeira, 2008. "One size does not fit all… An economic development perspective on the asymmetric impact of Patents on R&D," FEP Working Papers 292, Universidade do Porto, Faculdade de Economia do Porto.

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    More about this item

    Keywords

    Vertical disintegration Agglomeration economies Industrial districts;

    JEL classification:

    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R39 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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