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Uncovering the Urban Advantage of Australian Firms: New Evidence from BLADE Data

Author

Listed:
  • Antonio Andrés Bellofatto
  • Begoña Domínguez
  • Elyse C. Dwyer

Abstract

This paper quantifies the productivity advantages of urban firms within and across Australian states and industries. Following Combes et al. (2012), we decompose the source of urban advantages into agglomeration and selection effects using the most exhaustive data source on Australian businesses: BLADE. Our findings show that most of the urban productivity advantages are due to agglomeration effects and that these advantages differ substantially across Australian states. They range from 10% in WA to 1.5% in SA in terms of relative urban productivity gains for a representative firm with mean productivity. These advantages also vary across industries: they are twice as large for manufacturing firms in QLD (5.1%) vs NSW (2.4%) while nearly three times as large for service firms in NSW (11.7%) vs QLD (4.1%). Urban advantages are concentrated among mature firms, and among high-productivity businesses within young firms.

Suggested Citation

  • Antonio Andrés Bellofatto & Begoña Domínguez & Elyse C. Dwyer, 2022. "Uncovering the Urban Advantage of Australian Firms: New Evidence from BLADE Data," CAMA Working Papers 2022-47, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    • Handle: RePEc:een:camaaa:2022-47
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    File URL: https://cama.crawford.anu.edu.au/sites/default/files/publication/cama_crawford_anu_edu_au/2022-08/47_2022_bellofatto_dominguezz_dwyer.pdf
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    More about this item

    Keywords

    Agglomeration; Productivity Advantages; Regional vs Urban; Selection; Firms;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location
    • R5 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis

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