posted on 2012-07-25, 00:00authored byJoshua Drucker, Edward Feser
We investigate whether a more concentrated regional industrial structure - the dominance of a few large firms in a given industry in a region - limits agglomeration economies and ultimately diminishes the economic performance of firms in that industry, especially small ones. In an application to three industries using establishment-level production functions and a combination of confidential and publicly available data sources, we find a consistently negative and substantial direct productivity effect associated with regional industrial structure concentration and only mixed and relatively weak evidence that agglomeration economies are a mediating factor in that effect. (C) 2011 Elsevier B.V. All rights reserved.
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Publisher Statement
NOTICE: this is the author’s version of a work that was accepted for publication in Regional Science and Urban Economics. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Regional Science and Urban Economics, [Vol 42, Issue 1-2, Jan 2012] DOI:10.1016/j.regsciurbeco.2011.04.006