Firm Fragmentation and Urban Patterns

44 Pages Posted: 29 Jan 2009

See all articles by Esteban Rossi-Hansberg

Esteban Rossi-Hansberg

Princeton University - Department of Economics; National Bureau of Economic Research (NBER)

Pierre-Daniel G. Sarte

Federal Reserve Bank of Richmond

Raymond Owens III

affiliation not provided to SSRN

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We document several empirical regularities regarding the evolution of urban structure in the largest U.S. metropolitan areas over the period 1980-90. These regularities relate to changes in resident population, employment, occupations, as well as the number and size of establishments in different sections of the metropolitan area. We then propose a theory of urban structure that emphasizes the location and internal structure decisions of firms. In particular, firms can decide to locate their headquarters and operation plants in different regions of the city. Given that cities experienced positive population growth throughout the 1980s, we show that firm fragmentation produces the diverse set of facts documented in the article.

Suggested Citation

Rossi-Hansberg, Esteban Alejandro and Sarte, Pierre-Daniel and Owens III, Raymond, Firm Fragmentation and Urban Patterns. International Economic Review, Vol. 50, Issue 1, pp. 143-186, February 2009, Available at SSRN: or

Esteban Alejandro Rossi-Hansberg (Contact Author)

Princeton University - Department of Economics ( email )

Princeton, NJ
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Pierre-Daniel Sarte

Federal Reserve Bank of Richmond ( email )

P.O. Box 27622
Richmond, VA 23261
United States

Raymond Owens III

affiliation not provided to SSRN

No Address Available

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