Geographic Concentration and Establishment Scale: An Extension Using Panel Data

14 Pages Posted: 14 Sep 2006

See all articles by Salvador Barrios

Salvador Barrios

European Commission, JRC - IPTS

Luisito Bertinelli

Universite du Luxembourg

Eric Strobl

Ecole Polytechnique, Paris - Department of Economic Sciences; IZA Institute of Labor Economics

Abstract

In a recent study, Holmes and Stevens (2002) identify for the first time the positive relationship that exists between establishment scale and local industry concentration using a large cross-sectional plant-level data set for the United States. Using an exhaustive plant-level panel data set for Irish manufacturing covering nearly three decades, we are able to extend their analysis in two ways. First, we show that failing to control for fixed effects biases the relationship upward, although the essence of the result still remains after fixed effects are included. Second, the link is substantially weaker when plants locate for the first time in an area, but strengthens with age for those that survive in the long run. We link our results to recent contributions on the dynamics of geographic concentration.

Suggested Citation

Barrios, Salvador and Bertinelli, Luisito and Strobl, Eric, Geographic Concentration and Establishment Scale: An Extension Using Panel Data. Journal of Regional Science, Vol. 46, No. 4, pp. 733-746, October 2006, Available at SSRN: https://ssrn.com/abstract=930203 or http://dx.doi.org/10.1111/j.1467-9787.2006.00475.x

Salvador Barrios (Contact Author)

European Commission, JRC - IPTS ( email )

Edificio Expo
C/ Inca Garcilaso s/n
Seville, 41092
Spain
34 954 48 82 08 (Phone)
34 954 48 82 08 (Fax)

Luisito Bertinelli

Universite du Luxembourg ( email )

L-1511 Luxembourg
Luxembourg

Eric Strobl

Ecole Polytechnique, Paris - Department of Economic Sciences ( email )

Ecole Polytechnique
Department of Economics
Paris, 75005
France

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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