‘New’ new economic geography: firm heterogeneity and agglomeration economies.

For two decades new economic geography has focused on ‘macro-heterogeneity’ across locations showing how this can be endogenously generated by the microeconomic decisions of identical people and firms. This paper argues that future research should look more deeply into finer ‘micro-heterogeneity’ across people and firms, shedding light on how the interactions between the two levels of heterogeneity affect the existence and the intensity of agglomeration economies. [ABSTRACT FROM PUBLISHER]