Geographic Concentration Of Industries Research Articles

Productivity and the geographic concentration of industry: The role of plant scale

A large body of research has established a positive connection between an industry's productivity and the magnitude of its presence within locally defined geographic areas. This paper examines whether this relationship can be linked to a micro-level underpinning commonly associated with productivity: establishment scale. Looking at manufacturing industries across a sample of U.S. metropolitan areas, I find two primary results. First, average plant size increases substantially as an industry's employment in a metropolitan area rises. Second, the direct association between worker wages and local industry employment is more strongly associated with average plant size than the total number of plants, suggesting that localization economies may have significant organizational aspects.

Industrial Location and Voter Participation in Europe

Does the geographic concentration of industry ‘matter’ outside the United States? Observers have long speculated that while geographically concentrated industries may be influential in American politics, this is probably not the case in countries where the electorate votes more as a national constituency. Others disagree, urging that clustered industries have an advantage regardless of how the political map is drawn. We sharpen the terms of debate and weigh in with empirical evidence from a cross-sectional analysis of intended voter turnout in eight member-states of the European Union and a multi-year study of voter turnout in the Netherlands. These tests uniformly show that, across different types of electoral systems, including those in which voters vote as a national constituency, thereby removing any effects of electoral geography per se, workers in traded industries that are physically concentrated are, in fact, substantially more likely to vote than employees in traded but geographically dispersed sectors.

Productivity and the Geographic Concentration of Industry: The Role of Plant Scale

A large body of research has established a positive connection between an industry's productivity and the magnitude of its presence within locally defined geographic areas. This paper examines the extent to which this relationship can be explained by a micro-level underpinning commonly associated with productivity: establishment scale. Looking at data on two-digit manufacturing across a sample of U.S. metropolitan areas, I find two primary results. First, average plant size - defined in terms of numbers of workers - increases substantially as an industry's employment in a metropolitan area rises. Second, results from a decomposition of localization effects on labor earnings into plant-size and plant-count components reveal that the widely observed, positive association between a worker's wage and the total employment in his or her own metropolitan area-industry derives predominantly from the former, not the latter. Localization economies, therefore, appear to be the product of plant-level organization rather than pure population effects.

Comments and Discussion

Comments and Discussion Jared Bernstein and Robert C. Feenstra General Discussion References Amiti, Mary, and Shang-Jin Wei. 2004. "Fear of Service Outsourcing: Is It Justified?" Working Paper WP/04/186. Washington: International Monetary Fund. Arora, Ashish, and Alfonso Gambardella. 2004. "The Globalization of the Software Industry: Perspectives and Opportunities for Developed and Developing Countries." Working Paper 10538. Cambridge, Mass.: National Bureau of Economic Research. Bardhan, Ashok Deo, and Cynthia A. Kroll. 2003. "The New Wave of Outsourcing." Working Paper 1103. University of California, Berkeley: Fisher Center for Real Estate and Urban Economics. Bernard, Andrew B., J. Bradford Jensen, and Peter K. Schott. Forthcoming 2006. "Survival of the Best Fit: Exposure to Low Wage Countries and the (Uneven) Growth of U.S. Manufacturing Plants." Journal of International Economics 68 (1): 219-37. Bhagwati, Jagdish, Arvind Panagariya, and T. N. Srinivasan. 2004. "The Muddles over Outsourcing." Journal of Economic Perspectives 18 (Fall): 93-114. Blum, Bernardo S. 2004. "Trade, Technology and the Rise of the Service Sector: An Empirical Assessment of the Effects on U.S. Wage Inequality." University of Toronto (September). Brainard, Lael, and Robert E. Litan. 2004. "Offshoring Service Jobs: Bane or Boon—and What To Do?" Brookings Policy Brief 132 (April). Bronfenbrenner, Kate, and Stephanie Luce. 2004. "The Changing Nature of Corporate Global Restructuring: The Impact of Production Shifts on Jobs in the U.S., China, and around the Globe." U.S.-China Economic and Security Review Commission. October. Dossani, Rafiq, and Martin Kenney. 2004. "The Next Wave of Globalization? Exploring the Relocation of Service Provision to India." Working Paper 156. Stanford University: Asia Pacific Research Center. ———. 2003. "Went for Cost, Stayed for Quality? Moving the Back Office to India." Stanford University: Asia-Pacific Research Center. Duranton, Gilles, and Henry G. Overman. 2004. "Testing for Localisation Using Micro Geographic Data." London School of Economics. Ellison, Glenn and Edward L. Glaeser. 1999. "The Geographic Concentration of Industry: Does Natural Advantage Explain Agglomeration?" American Economic Review, Papers and Proceedings 89 (May): 311-16. ———. 1997. "Geographic Concentration of U.S. Manufacturing Industries: A Dartboard Approach." Journal of Political Economy 105 (October): 889-927. Farber, Henry S. 2005. "What Do We Know about Job Loss in the United States? Evidence from the Displaced Worker Survey, 1984-2004." Working Paper 498. Princeton University: Industrial Relations Section. ———. 2003. "Job Loss in the United States, 1981-2001." Working Paper 471. Princeton University: Industrial Relations Section. ———. 1993. "The Incidence and Costs of Job Loss: 1982-1991." BPEA, no. 1: 73-132. Fernandez, Raquel, 1989. Comment on "Industrial Wage Differential, International Competition and Trade Policy," by Lawrence F. Katz and Lawrence H. Summers. In [End Page 131] Trade Policies for International Competitiveness, edited by Robert Feenstra, pp. 117-22. University of Chicago Press. Gardner, Jennifer M. 1993 "Recession Swells Count of Displaced Workers." Monthly Labor Review 116 (June): 14-23. Gartner Research. 2004. "Worldwide IT Services Market Forecast, 2002-2007" (January 12). Gentle, Chris. 2003. "The Cusp of a Revolution: How Offshoring Will Transform the Financial Services Industry." Deloitte Research. Harrigan, James, and Rita A. Balaban. 1999. "U.S. Wages in General Equilibrium: The Effects of Prices, Technology, and Factor Supplies, 1963-1991." Working Paper 6981. Cambridge, Mass.: National Bureau of Economic Research. Helpman, Elhanan, and Paul R. Krugman. 1985. Market Structure and Foreign Trade: Increasing Returns, Imperfect Competition, and the International Economy. Cambridge, Mass.: MIT Press. Imbs, Jean, and Romain Wacziarg. 2003. "Stages of Diversification." American Economic Review 93 (March): 63-86. Katz, Lawrence F., and Lawrence H. Summers. 1989a. "Can Interindustry Wage Differentials Justify Strategic Trade Policy?" In Trade Policies for International Competitiveness, edited by Robert Feenstra, pp. 85-116. University of Chicago Press. ———. 1989b. "Industry Rents: Evidence and Implications." In Brookings Papers on Economic Activity: Microeconomics 1989, edited by Martin N. Baily and Clifford Winston, pp. 209-75. Brookings. Kirkegaard, Jacob F. 2004. "Outsourcing—Stains on the White Collar?" Washington: Institute for International Economics (February). Kletzer, Lori G. 2001. Job Loss from Imports: Measuring the Costs. Washington: Institute for International Economics. ———. 1998. "Job Displacement." Journal of Economic Perspectives 12 (Winter): 115-36. ———. 1995. "White Collar Job Displacement, 1983-91." In Proceedings of the 47th Annual Meeting, pp. 98-107. Madison,Wis.: Industrial Relations Research...

Industry Localization and Earnings Inequality: Evidence from U.S. Manufacturing

While the productivity gains associated with the geographic concentration of industry (i.e. localization) are by now well-documented, little work has considered how those gains are distributed across individual workers. This paper offers evidence on the connection between total employment and the relative wage earnings of high- and low-skill workers (i.e. inequality) within two-digit manufacturing industries across the states and a collection of metropolitan areas in the U.S. between 1970 and 1990. Using two different measures - 90-10 percentile gaps in both overall and residual wages - I find that wage dispersion falls substantially as industry employment expands. Results from a simple decomposition of this relationship into average plant-size and plant-count components indicate overwhelmingly that average plant size is the primary driving mechanism. Although not necessarily inconsistent with theories appealing to intermediate inputs or technological spillovers, such findings are particularly supportive of Marshall's (1920) labor market pooling explanation for localization.

Integration of markets and industrial concentration: evidence from Spain, 1856-1907

The aim of this paper is to analyse the phenomena of trade liberalization and market integration in 19th century Spain and their effect on the geographical concentration of industrial activity. This empirical analysis confirms the existence of positive relationships between the degree of scale economies and industrial concentration and also between the degree of centrality and industrial concentration. The empirical data on trade policy show that protectionist policies did not foster a geographical concentration of industry in the 19th century Spanish economy.

Scale economies and the geographic concentration of industry

In recent empirical literature on spatial agglomeration, many papers find evidence consistent with location‐specific externalities of some sort. Our willingness to accept evidence of agglomeration economies depends on how well key estimation problems have been addressed. Three issues are particularly troublesome for identifying agglomeration effects: unobserved regional characteristics, simultaneity in regional data, and multiple sources of externalities. Two empirical results appear to be robust to problems created by the first two issues: (a) individual wages are increasing in the presence of more‐educated workers in the local labor force, which is consistent with localized human‐capital externalities, and (b) long‐run industry growth is higher in locations with a wider range of industrial activities, which suggests that firms benefit from being in more diverse urban environments. Other evidence is supportive of agglomeration effects related to regional demand linkages and short‐run, industry‐specific externalities.

Agglomeration Economies and Geographical Concentration of Industries: A Case Study of Manufacturing Sectors in Postwar Japan

There have been secular changes in the location of manufacturing industries away from large metropolitan areas in Japan. Using prefectural data in five major manufacturing sectors for three periods (1960–1973, 1973–1980, and 1980–1995), this study attempts to identify the factors affecting the changing patterns of industrial concentration. We found through regression analysis of employment growth that while the “pull” to cities by agglomeration economies has been weak, the “push” by congestion of cities and increasing competition with service sectors has had pervasive impacts on the geographical dispersion of industries. J. Japan. Int. Econ., September 2000, 14(3), pp. 189–203. Faculty of Economics, Tokyo Metropolitan University, Minami-Osawa, Hachiohji, Tokyo 192-0397, Japan. Copyright 2000 Academic Press.Journal of Economic Literature Classification Numbers: L60, R11.

The Geographic Concentration of Industry: Does Natural Advantage Explain Agglomeration?

The Geographic Concentration of Industry: Does Natural Advantage Explain Agglomeration? by Glenn Ellison and Edward L. Glaeser. Published in volume 89, issue 2, pages 311-316 of American Economic Review, May 1999

Analyzing Production Feasibility and Market Potential For Florida Aquaculture Catfish Products

AbstractA spatiotemporal linear programming model (GAMS) was constructed to simulate the catfish production and marketing system in the U.S. in order to study the economic feasibility of Florida entering the aquaculture catfish industry. Evaluation of base model results and sensitivity analysis were used to identify constraints to the potential expansion of the catfish industry in Florida. Results indicated production and processing costs were more important in determining the locus of production and processing than were processing capacity, storage costs and capacity, and transportation costs. Thus, existing industry geographic concentration is likely to continue, but small new processing plants could develop proximate markets for fresh product.

Japan's Ecological Crisis

Part I of this paper begins by examining the significance of the ecologist's concept of the climax to social and economic geography. Some views of Sauer, Hutchinson and Malthus are noted, and it is suggested that present-day Japan may represent the nearest approach yet seen to the human-ecological climax situation. The intense congestion which now characterizes Japan has arisen basically because during the past ioo years the Japanese have superimposed a vast industrial economy upon an already exceptionally intensive agricultural base, in a country possessing an unusually low proportion of flat land. Part II examines first the primary geographical concentration of industry within the Pacific belt of Japan, as a preliminary to the consideration of problems of the urban living environment, pollution, and the despoliation of scenery. The discussion of each of these problems includes an indication of the remedial measures being employed by the Japanese government. Land shortage is discussed together with the impact of rising land prices upon urban land use. Problems associated with the juxtaposition of industrial zones and residential areas are also outlined. Four major incidents of pollution are described, and the paper ends by indicating the vulnerability of Japan's scenery in the context of an advanced industrial economy.