Abstract
This paper investigates the effects of industry agglomeration on growth in U.S. metropolitan areas, and then examine whether these agglomeration effects contribute to changes in the geographic concentration of industry. Study results suggest that a high localization of industry, measured using location quotients, leads to a decrease in city-industry growth as indicated by the net change in establishment counts. Alternatively, large initial city-industry size is associated with an increase in the change in the number of establishments above or below what is explained by overall metropolitan area growth. Both of these agglomeration effects contribute to a greater dispersion of industry.
Highlights
Since the work of Alfred Marshall in the late nineteenth century, economists, geographers, and other regional scientists have been intrigued by the topics of industry agglomeration and the geographic evolution of industry
This paper investigates the effects of industry agglomeration on the expansion of 121 3digit SIC industries in U.S metropolitan areas, and examines whether these agglomeration effects contribute to changes in the geographic concentration of industry
We find a positive relationship between the change in the geographic concentration of industry and the dummy variable indicating that the sector is characterized by positive agglomeration effects associated with localization and city-industry size
Summary
Since the work of Alfred Marshall in the late nineteenth century, economists, geographers, and other regional scientists have been intrigued by the topics of industry agglomeration and the geographic evolution of industry. For each of the sectors, we estimate the effects of city-industry localization (i.e., location quotient) and size (i.e., number of incumbent establishments), two measures of agglomeration, on the net change in the number of city-industry establishments (above or below what is predicted by overall metropolitan area growth) between 1986 and 1996 With these results in hand, we analyze changes in the geographic concentration of the. This growth has generated interest in the agglomeration and geographic dispersion of services across and within metropolitan areas (Kim, 1987; Ó hUallacháin, 1989; Coffey and Shearmur, 2002) This line of research is especially relevant to the empirical analysis presented in this paper, which focuses on industries that expanded by 1,000 or more establishments nationally between 1986 and 1996.
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