A SPATIAL ANALYSIS OF SECTORAL VARIATIONS IN RETURNS TO EXTERNAL SCALE

ABSTRACT.  This paper reports results of spatially explicit analyses of external scale effects across a variety of sectors, including manufacturing. Using data from New England counties, earnings are found to exhibit increasing returns to urbanization in every sector. Returns to sectoral localization are mixed, however, with increasing returns in one sector, constant returns in five sectors, and decreasing returns in two sectors. External scale effects are fairly confined in their spatial extent, with only retailing and services particularly marked by spillover effects from neighboring counties.