Marshall&Apos;S Economies
57 Pages Posted: 27 Apr 2000 Last revised: 8 Feb 2021
Date Written: September 1999
Abstract
This paper estimates the nature and magnitude of the local externalities from own industry scale, as envisioned by Marshall. Census panel data on individual plants in high-tech and machinery industries across up to 487 countries are utilized, to quantify the direct effects of local external environment on plant productivity. Careful attention is paid to endogeneity issues in estimation. Magnitudes of scale externalities for corporate versus single plant firms are estimated and the sources of externalities (employment, numbers of plants, numbers of births, etc.) and extent (within the county versus extending to the rest of the MSA) are investigated. The paper asks in addition whether externalities are static or dynamic, a key issue in thinking about urban growth and industrial mobility; and whether they are dependent just on local own industry activity or also on overall local urban scale and/or diversity, a key issue in analyzing industrial composition and development of cities. The paper relates the findings on externalities for different industries to the extent of agglomeration and the degree of mobility of those industries across cities.
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
Cities and Growth: Theory and Evidence from France and Japan
By Jonathan Eaton and Zvi Eckstein
-
Bones, Bombs and Break Points: The Geography of Economic Activity
-
Rank-1/2: A Simple Way to Improve the OLS Estimation of Tail Exponents
By Xavier Gabaix and Rustam Ibragimov
-
Rank-1/2: A Simple Way to Improve the Ols Estimation of Tail Exponents
By Rustam Ibragimov and Xavier Gabaix
-
How Migration Restrictions Limit Agglomeration and Productivity in China
By Chun-chung Au and J. Vernon Henderson
-
The Return of Zipf: Towards a Further Understanding of the RankāSize Distribution
By Steven Brakman, Harry Garretsen, ...
