Spatial Economics Seminar Amsterdam

Speaker(s)
Giulia Faggio (London School of Economics, United Kingdom)
Date
Monday, 13 October 2014
Location
Amsterdam

Many prior treatments of agglomeration explicitly or implicitly suppose that all industries agglomerate for the same reasons, with traditional Marshallian (1890) factors affecting all industries similarly. An important instance of this is the extrapolation from one key sector or cluster to the larger economy, such as the drawing of very general lessons about agglomeration from the specific case of the Silicon Valley. Another instance is the pooling of data to examine common tendencies in agglomeration even across industries that theory suggests should agglomerate differently. This paper uses UK establishment-level data on coagglomeration to consider the heterogeneity across industries in the microfoundations of agglomeration economies. The analysis takes place within a unified theoretical framework that includes both traditional Marshallian theories and also alternative theories that emphasize the adaptive and organizational aspects of agglomeration. The pattern of heterogeneity that we find is consistent with both the Marshallian and alternative approaches.