| Abstract: | Plant-level data from the Longitudinal Research Database ofthe US Bureau of the Census are employed to estimate the impactof agglomeration economies on industry productivity across USmetropolitan areas. This analysis seeks to remedy three shortcomingsof previous empirical studies of agglomeration economies: relianceon aggregate spatial or sectoral data; lack of attention tospatial dependence in data; and representation of agglomerationeconomies with vague proxies such as city-size. We show howa number of establishment-, industry-, and city-specific factorsinfluence labor productivity across US cities, and we pay particularattention to separating the influence of different kinds ofagglomeration economies on firm efficiency. Here we follow Marshall'sPrinciples of Economics in examining the spatial concentrationof input–output linkages, the character of local laborpools and embodied technological spillovers. |
