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This paper analyses whether and how agglomeration economies - related variety, specialisation and urbanisation - affect the export performance of Italian local labour markets (LLM). Adopting spatial econometric techniques, and controlling for potential non-linear effects, we find that related variety has a negligible effect on LLMs' export intensity, while the effect of specialisation economies is negative. On the contrary, urbanisation economies positively affect export intensity. The robustness of these results is tested and confirmed using an alternative (institutional-based) spatial weights matrix. [ABSTRACT FROM AUTHOR]

The aim of the paper is to present a review of the literature on agglomeration economies in a light such that it is possible to uncover the building blocks for use in a multidimentional approach to agglomeration economies. The paper claims that the different conceptual dimensions – industrial, socio-cultural/cognitive and geographic – build upon the three micro-foundations of agglomeration economies – indivisibility, synergy and proximity – and explain their nature, scope and intensity. The paper stresses two main issues. The first is that a socio-cultural/cognitive perspective still today ignored by mainstream approaches to agglomeration economies is an additional important conceptual dimension on which to understand the complex mechanisms whereby exchanges of knowledge, labour or intermediate goods take place in agglomerated areas. The second is that a multidimensional approach comprising the three different dimensions in the study of agglomeration economies makes it possible to overcome a deterministic approach to agglomeration economies and move instead towards a stochastic interpretation which opens the black box of this complex phenomenon. [ABSTRACT FROM AUTHOR]

Agglomeration economies explain why productivity increases as the size of agglomeration increases, and thereby partly explain the importance of location and space in economic development. Agglomeration economies are based on the distance between firms, labour and the market. Infrastructure investment can be a tool used by governments to affect this distance, where, in doing so, they induce agglomeration economies and increase economic growth. In this paper, we will discuss the importance of considering types of networks when analysing agglomeration economies using multiregional new economic geography (NEG)-based spatial general equilibrium models. These models typically use abstract bi-regional origin-destination networks to describe the cost of transporting or commuting between regions. These abstract networks are like tunnels between regions and do not take into account the actual roads in real infrastructure networks used for transport and traffic between destinations. In other words, in real infrastructure networks, which we label full networks, people and goods move from one region to another via actual roads and possibly via third regions. In the empirical economic literature, there is a significant difference between the economic effect of changes in a bi-regional origin-destination network and the economic effect of changes in a full network. To date, no systematic explanation has been given for this difference in the size of the effects. Lack of an explanation for this difference may lead to confusion among policy-makers who have to decide on infrastructure investment. In this methodological paper, we discuss the reason for this difference. We do not discuss the absolute size of the agglomeration effects, only the relative difference that exists when using different types of networks. In order to explain the difference, we introduce a methodology that translates the effects in a bi-regional origin-destination network into similar effects in a full network, making it possible to systematically compare the economic importance of all links (roads) in such a network. This is highly relevant to policy-makers, who can now interpret the model results on a real full infrastructure network. We will also show the mathematical relationship between the importance of agglomeration economies on a link in a full network and the importance of agglomeration economies on a link in a bi-regional origin-destination network. Finally, the methodology is illustrated with a case study from the Netherlands. [ABSTRACT FROM AUTHOR]

Transit oriented development (TOD) advocates enhancing public transport connectivity, clustering urban development around public transport nodes and creating station areas with high‐density, diverse land uses and pedestrian‐ and cycling‐friendly environments. While this urban development approach is expected to have positive effects on the urban economy, the impacts of TOD strategies on economic efficiency are yet to be empirically examined. This study operationalised economic efficiency as labour productivity; developed a methodology to investigate how labour productivity is distributed at the local level, to explore the relationships between TOD characteristics and the clustering of labour productivities across different types of industries within a city; and applied it to the case of Beijing, China. The results show that in most cases the distribution of labour productivity has no significant association with TOD characteristics. However, in certain consumer‐service‐related economic sectors (i.e. wholesale and retail; accommodation and catering; and culture, sports, and entertainment) labour productivity is on average significantly higher in an area with stronger transit‐oriented development characteristics. Furthermore, within the conceptual framework of agglomeration economies, the paper identified specific TOD characteristics that are related to the clustering of the higher level of labour productivities in certain industry sectors. These outcomes provide insights for developing more focused TOD strategies, aimed at enhancing the clustering of labour productivities in the identified industries around the existing metro station areas in Beijing. [ABSTRACT FROM AUTHOR]

This paper contributes to the existing literature on industrial location by discussing the territorial levels that are used in location analysis. We use data for new manufacturing firms and analyse the advantages and disadvantages of performing location analyses at three levels: municipality, county and travel-to-work areas. We show that location determinants vary according to the territorial level used in the analysis and conclude that the level at which the investigation is performed should be carefully selected. [ABSTRACT FROM AUTHOR]

ABSTRACT Although anecdotal evidence suggests that co-location can bring about several benefits for co-located logistics companies, implying the need to incorporate such considerations in location decisions, these benefits have hardly been analysed empirically. This paper provides detailed insights for decision making by precisely analysing the synergies attained through the co-location of logistics firms in specialised and diverse logistics concentration areas. The paper analyses whether co-location in logistics concentration areas that specialise in fresh produce provides additional benefits over co-location in diverse logistics concentration areas that do not specialise in any particular type of products. A survey of managers of 127 logistics firms located in logistics concentration areas tested for differences in synergies through co-location in specialised versus diverse logistics concentration areas. Logistics firms co-located in fresh produce logistics parks share knowledge, combine transport and storage capacities, and trade products more than logistics firms co-located in diverse logistics concentration areas. [ABSTRACT FROM AUTHOR]

The goal of this paper is to study empirically the determinants of foreign firms' location in Polish regions with a special focus on the role of firm size. To derive testable hypotheses on the firm location choice an analytical framework that combines the firm heterogeneity and the new economic geography literatures is used. In this framework, agglomeration economies, technical infrastructure, and labour market characteristics may affect location decisions of foreign investors. The hypotheses derived from the theory are validated empirically using the regional dataset at NUTS 2 level of spatial aggregation for the period 1999-2010. The empirical evidence confirms the existence of firm heterogeneity with respect to the determinants of firm location choice. [ABSTRACT FROM AUTHOR]

The inherent tension between regional equality and economic growth (efficiency) is recently much debated in the context of place based development policy and agglomeration in the European Union. A general conclusion reached in the literature is that a policy targeted at regional equality may be harmful for economic growth. Such policy therefore should be transformed in such a way that it also promotes the mobility of both people and firms and hence facilitates the possibilities of increased agglomeration. Recent insights from economic theories suggest that agglomeration externalities are not taken into account in the migration decision of firms and people, causing the dynamic urbanisation processes to not necessarily result in a (social) welfare optimum. This is even more so if other welfare effects than GDP and product variety are taken into account. Regional economic development is not sustainable if the dynamic urbanisation processes stemming from agglomeration economies do not lead to a welfare optimum. In this paper we assess the possibility of a non-sustainable regional development path. We conclude that strong additional negative externalities of growing large agglomerations are harder to prove than negative externalities of small agglomerations becoming smaller. Moreover, the size of short run negative effects that will stimulate the migration of people has not been adequately assessed. The European Union should therefore be careful in interpreting place-based costs and benefits of growing, large agglomerations at the detriment of small regions. [ABSTRACT FROM AUTHOR]

The aim of the work is to understand how the role of local externalities (agglomeration economies and related variety), as well as firm heterogeneity, have influenced the internationalisation strategies chosen by Italian manufacturing firms from 1998 to 2006. Based on the 10th survey of the corporate bank Unicredit-Capitalia, I construct an unbalanced panel data of 19,635 firms. As in Cainelli, Ganau and Iacobucci, I compute related variety as a measure of the input-output relationships between firms of different sectors: this procedure allows taking into account the vertical related variety as a proxy for diversification. The results of the econometric analysis, conducted with multinomial logistic regressions, show that vertically related variety and productivity positively influence both export and FDI strategies. The extant literature on firm heterogeneity has been confirmed, while important findings on local externalities enrich the already existing theories. [ABSTRACT FROM AUTHOR]

ABSTRACT This paper uses data from the Community Innovation Survey for Belgium to evaluate to what extent firms located in sectors and regions characterised by high employment concentration innovate more. We analyse the innovative performance of Belgian firms and relate it to agglomeration measures, as well as to a number of control variables. Our findings show a positive impact of localisation and urbanisation economies on firm-level innovation output, lending support to the hypothesis that firms can benefit from their location within regions/sectors characterised by high employment concentration. In an analysis of low, medium, and high-tech manufacturing and service industries, localisation economies are shown to improve firms' innovativeness only for low-tech manufacturing and service sectors, while urbanisation externalities are shown to matter more for high-tech service sectors. This suggests that localisation economies can be an important source of competitiveness for low-tech sectors, while urbanisation economies improve innovativeness of high-tech service firms. [ABSTRACT FROM AUTHOR]

Abstract: It is well established in the literature that amenities are important in affecting regional patterns by influencing both workers' and firms' location decisions. Using the seminal contribution made by Beeson and Eberts, this study performs a wage change decomposition into amenity (workers) and productivity (firms) components. The results reveal that firms are more significant when explaining high average wage regions in Chile, since they derive more benefits from agglomeration economies and natural resources. Finally, the results also confirm how important agglomeration economies are in developing countries. [ABSTRACT FROM AUTHOR]

Recent empirical research has questioned the ability of agglomeration economies to stimulate profitability and healthy financial performance in firms. We devise a cross-sectional sample of approximately 410,000 firms that were active in all subsectors of the manufacturing industry and that were located across 191 NUTS 2 regions of 15 European Union member states in 2005. For each firm, we calculate two profitability indicators and a labour efficiency indicator. We find that the part of the variance of the profitability and labour efficiency indicators that is attributed to regions is very small. Furthermore, fitted multilevel models show that the quantitative effect of regional specialisation, despite being statistically significant, is very small. The results are robust across more refined geographical scales and subsectors. However, the NUTS 2 level remains the major spatial scale of the design and implementation of European Union regional policy. Our results benefit from the power and safety of a large sample and challenge conventional approaches to agglomeration research and cluster policy. [ABSTRACT FROM AUTHOR]