Geographic concentration and the temporal scope of agglomeration economies: An index decomposition

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Author(s)Wren C
Publication type Article
JournalRegional Science and Urban Economics
ISSN (print)0166-0462
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This paper decomposes a geographical concentration index to examine for differences in the temporal scope of natural advantages and spillovers on industrial location. The former are time-invariant location attributes, whereas spillovers may decay due to obsolescence and the spatial diffusion of knowledge. Coupled with a frequency estimator approach, the paper develops an empirical methodology for quantifying these effects. This is tested by numerical simulation and by application to a dataset on the location of manufacturing foreign direct investment across the regions of Great Britain over 1985-2005. The results indicate that spillovers decay and extend for about 5 years on average across industries. Spillovers have the same location effect as natural advantages but only over a 3-year time horizon.
PublisherElsevier BV
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