The Empirics of Agglomeration Economies

By Pierre-Philippe Combes, L. Gobillon. Social Science Research Network, 2014

640 citations recorded by the source corpus.

We propose an integrated framework to discuss the empirical literature on the local determinants of agglomeration effects. We start by presenting the theoretical mechanisms that ground individual and aggregate empirical specifications. We gradually introduce static effects, dynamic effects, and workers' endogenous location choices. We emphasise the impact of local density on productivity but we also consider many other local determinants supported by theory. Empirical issues are then addressed. Most important concerns are about endogeneity at the local and individual levels, the choice of a productivity measure between wage and TFP, and the roles of spatial scale, firms' characteristics, and functional forms. Estimated impacts of local determinants of productivity, employment, and firms' locations choices are surveyed for both developed and developing economies. We finally provide a discussion of attempts to identify and quantify specific agglomeration mechanisms.

Subfields: Economics and Econometrics, Political Science and International Relations

View Paper: https://www.semanticscholar.org/paper/87253727ae114915a7b56f59dd2a0f363fac224e

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Economics and Econometrics

In Political Science and International Relations

Citations in the corpus

The Aggregate Productivity Effects of Internal Migration: Evidence from Indonesia (2017, positive): “In contrast, work by Combes and Gobillon (2015) suggests a l a of around 2 0.04.”
Optimal Spatial Policies, Geography, and Sorting* (2018, positive): “Efficiency Spillovers { γP θ′,θ } Previous empirical studies, such as Ciccone and Hall (1996), Combes et al. (2008), and Kline and Moretti (2014a), estimate elasticities of labor productivity with respect to employment density. Across specifications, these studies find elasticities in the range of (”
Economic reforms and industrial policy in a panel of Chinese cities (2016, methodology): “Criscuolo et al. (2012) use rm level data to study an investment subsidy program in the U.”
How Close Is Close? The Spatial Reach of Agglomeration Economies (2020, background): “This echoes evidence that doubling city size increases productivity but by a comparatively small amount, typically less than 5% (e.g. Rosenthal and Strange, 2004; Combes and Gobillon, 2015; Jales, Jiang and Rosenthal, 2019).”
What Can Be Learned from Spatial Economics? (2019, neutral): “Our purpose is not to provide an in-depth discussion of the methodological issues raised by the measurement of agglomeration economies (Rosenthal and Strange 2004; Combes, Duranton, and Gobillon 2011; Combes and Gobillon 2015).”
The Costs of Agglomeration: House and Land Prices in French Cities (2018, background): “Extent literature about agglomeration effects usually regresses log wages or other productivity outcomes on log city population or density and never highlighted much evidence of a deviation from log linearity (Combes and Gobillon, 2015).”
Agglomeration Theory with Heterogeneous Agents (2014, background): “…urban economists nowadays is that the ‘true’ value of ǫ is closer to the lower bound, especially when unobserved heterogeneity is controlled for using individual data and when different endogeneity concerns are properly addressed (see the chapter by Combes and Gobillon, 2014, in this handbook).”
Agglomeration and Innovation (2014, background): “…from formulating their common principles, such as sharing, matching, etc. Recent surveys of the empirical literature on agglomeration economies include Eberts and McMillen (1999) and Rosenthal and Strange (2004), and Combes and Gobillon (2014) provide a comprehensive update in this handbook.”
What is Different About Urbanization in Rich and Poor Countries? Cities in Brazil, China, India and the United States (2017, neutral): “The forces that drive urban success seem similar in the rich and poor world, even if limited migration and difficult housing markets make it harder for a spatial equilibrium to develop.”