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The plant size-place effect: agglomeration and monopsony in labour markets

Manning, Alan ORCID: 0000-0002-7884-3580 (2010) The plant size-place effect: agglomeration and monopsony in labour markets. Journal of Economic Geography, 10 (5). pp. 717-744. ISSN 1468-2702

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Identification Number: 10.1093/jeg/lbp042


This article shows, using data from both the USA and the UK, that average plant size is larger in denser markets. However, many popular theories of agglomeration-spillovers, cost advantages and improved match quality-predict that establishments should be smaller in cities. The article proposes a theory based on monopsony in labour markets-firms in all labour markets have some market power but that they have less market power in cities-that can explain the stylized fact. It also presents evidence that the labour supply curve to individual firms is more elastic in larger markets, consistent with the monopsony hypothesis.

Item Type: Article
Official URL:
Additional Information: © 2010 OUP
Divisions: Centre for Economic Performance
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HD Industries. Land use. Labor
Date Deposited: 22 Sep 2010 13:16
Last Modified: 08 Dec 2023 20:48

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