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This paper identifies the main sources of urban increasing returns, after Marshall. The geographical distance across which externalities flow is also examined. We bring to bear on these questions plant-level data organized in the form of a panel across the years 1989 and 1999. Plant-level production functions are estimated across the Canadian manufacturing sector as a whole and for five broad industry groups, each characterized by the nature of its output. The panel data overcome selection bias resulting from unobserved plant-level heterogeneity that is constant over time. A related set of estimates using instrumental variables allay persistent concerns with endogeneity. Results provide strong support for Marshall's claims about the importance of buyer-supplier networks, labor market matching and spillovers. We show that spillovers enhance plant productivity within industries rather than between them and that these spillovers are highly localized. [ABSTRACT FROM AUTHOR]

ABSTRACT The objective of this paper is to analyze why firms in some industries locate in specialized economic environments (localization economies) while those in other industries prefer large city locations (urbanization economies). To this end, we examine the location decisions of new manufacturing firms in Spain at the city level and for narrowly defined industries. First, we estimate firm location models to obtain estimates that reflect the importance of localization and urbanization economies in each industry. Then, we regress these estimates on industry characteristics related to the potential importance of labor market pooling, input sharing, and knowledge spillovers. Urbanization effects are high in knowledge-intensive industries, suggesting that firms locate in large cities to benefit from knowledge spillovers. We also find that localization effects are high in industries that employ workers whose skills are more industry-specific, suggesting that industries locate in specialized economic environments to share a common pool of specialized workers. [ABSTRACT FROM AUTHOR]

Transaction costs have attracted considerable attention in the theoretical literature on residential mobility. Transaction costs are thought to cause suboptimal consumption of housing but may also negatively affect labor market outcomes. In the current paper, we demonstrate empirically for the Netherlands that transaction costs have a strong negative effect on the owners' probability of moving. Under a range of different specifications, it appears that a 1 percent-point increase in the value of transaction costs—as a percentage of the value of the residence—decreases residential mobility rates by (at least) 8 percent. The estimates imply that ownership to ownership mobility rates would be substantially higher in the absence of the current 6 percent ad valorem buyer transaction tax. Our estimates are consistent with the observation that in the Netherlands ad valorem transaction costs mainly consist of buyer transaction costs. [ABSTRACT FROM AUTHOR]

This article investigates the dynamics of the spatial wage premium for workers employed on temporary and permanent contracts. We use an employer–employee database that covers the universe of young Italian employees for 2005–2016. On controlling for individual observed and unobserved heterogeneity and endogeneity of the relationship, our findings indicate that workers hired on a temporary basis do not enjoy the same benefits from agglomeration externalities as workers on permanent contracts. Nonetheless, the likelihood of a temporary worker switching to a permanent contract, as well as its wage premium, increases with city size, thus partially offsetting the spatial dynamics disadvantage. [ABSTRACT FROM AUTHOR]