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Heterogeneous agglomeration

Faggio, Giulia, Silva, Olmo and Strange, William C. (2017) Heterogeneous agglomeration. Review of Economics and Statistics, 99 (1). pp. 80-94. ISSN 0034-6535

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Identification Number: 10.1162/REST_a_00604


Many prior treatments of agglomeration explicitly or implicitly assume that all industries agglomerate for the same reasons, with the traditional Marshallian (1890) factors of input sharing, labor pooling, and knowledge spillovers affecting all industries similarly. An important instance of this approach is the extrapolation from one key sector to the larger economy, such as the drawing of very general lessons about agglomeration from the specific case of the Silicon Valley. Another is the pooling of data to examine common tendencies in agglomeration even across very different industries. This paper uses UK establishment-level data on coagglomeration to document substantial heterogeneity across industries in the microfoundations of agglomeration economies. The analysis shows that the Marshallian factors interact with the organizational and adaptive aspects of agglomeration discussed by Chinitz (1961), Vernon (1960), and Jacobs (1969). Our findings highlight the importance of treating Marshall’s microfoundations of agglomeration as complements to the analysis of Jacobs and others, rather than as alternatives.

Item Type: Article
Official URL:
Additional Information: © 2017 The President and Fellows of Harvard College and the Massachusetts Institute of Technology
Divisions: Geography & Environment
Spatial Economics Research Centre
Subjects: G Geography. Anthropology. Recreation > G Geography (General)
H Social Sciences > HA Statistics
H Social Sciences > HD Industries. Land use. Labor
Date Deposited: 18 Dec 2015 15:32
Last Modified: 20 Oct 2021 02:27
Projects: ES/J021342/1, 45120062
Funders: Economic and Social Research Council, Humanities Research Council of Canada, The Suntory and Toyota International Centres for Economics and Related Disciplines

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