What Causes Industry Agglomeration? Evidence from Coagglomeration Patterns
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Ellison_What causes.pdf
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1 MB
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Author(s)
Ellison, Glenn
Glaeser, Edward L.
Kerr, William R.
Date Issued
June 2010
Journal
American Economic Review
Publisher
American Economic Association
Citation
Ellison, Glenn, Edward L Glaeser, and William R Kerr. “What Causes Industry Agglomeration? Evidence from Coagglomeration Patterns.” American Economic Review 100, no. 3 (June 2010): 1195-1213.
Version
Final published version
Abstract
Why do firms cluster near one another? We test Marshall's theories of industrial agglomeration by examining which industries locate near one another, or coagglomerate. We construct pairwise coagglomeration indices for US manufacturing industries from the Economic Census. We then relate coagglomeration levels to the degree to which industry pairs share goods, labor, or ideas. To reduce reverse causality, where collocation drives input-output linkages or hiring patterns, we use data from UK industries and from US areas where the two industries are not collocated. All three of Marshall's theories of agglomeration are supported, with input-output linkages particularly important.
MIT Department
Massachusetts Institute of Technology. Department of Economics
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Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use.
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DOI of Published Version
https://doi.org/10.1257/aer.100.3.1195
