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Industry Agglomeration and Investment in Rural Businesses

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  • Todd M. Gabe

Abstract

This paper examines the effects of local industry agglomeration on investments in equipment and machinery by businesses located in Maine. Descriptive analysis of the data indicates that a substantial amount of the investments in nonmetropolitan counties and small towns occurred in high-agglomeration county-industries. However, econometric results imply that, while positive, the effects of agglomeration on investment are somewhat modest. Further analysis of industry-specific descriptive statistics provides mixed evidence on the connection between business investment and local industry agglomeration. These results suggest that local policymakers should proceed with caution when implementing cluster-based economic development strategies. Copyright 2005, Oxford University Press.

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  • Todd M. Gabe, 2005. "Industry Agglomeration and Investment in Rural Businesses," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 27(1), pages 89-103.
    • Handle: RePEc:oup:revage:v:27:y:2005:i:1:p:89-103
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    1. Marasteanu, I. Julia & Jaenicke, Edward C., 2013. "Agglomeration and Spatial Dependence in Certified Organic Operations in the United States," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 149551, Agricultural and Applied Economics Association.
    2. Lambert, Dayton M. & McNamara, Kevin T. & Garrett, Megan I., 2006. "An Application of Spatial Poisson Models to Manufacturing Investment Location Analysis," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 38(1), pages 1-17, April.
    3. Georgeanne M. Artz & Younjun Kim & Peter F. Orazem, 2016. "Does Agglomeration Matter Everywhere?: New Firm Location Decisions In Rural And Urban Markets," Journal of Regional Science, Wiley Blackwell, vol. 56(1), pages 72-95, January.
    4. Brache, Jose & Felzensztein, Christian, 2019. "Geographical co-location on Chilean SME's export performance," Journal of Business Research, Elsevier, vol. 105(C), pages 310-321.
    5. Marasteanu, I. Julia & Jaenicke, Edward C., 2014. "Clusters of Organic Operations and their Impact on Regional Economic Growth in the United States," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170336, Agricultural and Applied Economics Association.
    6. repec:rre:publsh:v:36:y:2006:i:2:p:140-62 is not listed on IDEAS
    7. Hans Lööf & Pardis Nabavi, 2014. "Survival, productivity and growth of new ventures across locations," Small Business Economics, Springer, vol. 43(2), pages 477-491, August.
    8. Maureen Kilkenny, 2010. "Urban/Regional Economics And Rural Development," Journal of Regional Science, Wiley Blackwell, vol. 50(1), pages 449-470, February.
    9. Jaenicke, Edward C. & Goetz, Stephan J. & Wu, Ping-Chao & Dimitri, Carolyn, 2009. "Identifying and Measuring the Effect of Firm Clusters Among Certified Organic Processors and Handlers," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49205, Agricultural and Applied Economics Association.

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