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Agglomeration Externalities and Growth in Urban Industries - empirical evidence from Sweden, 1896-1910

Berger, Thor LU (2011) EKHK02 20111
Department of Economic History
Abstract
What are the effects of regional specialization, industrial diversity, and local competition on industrial growth? Utilizing a novel dataset on the Swedish manufacturing industry, 1896-1910, an OLS model is estimated that captures the relationship between dynamic agglomeration externalities, i.e. knowledge spillovers, and employment growth in industries located in cities. The main results are that on a high level of industrial aggregation, specialization is associated with lower successive employment growth in urban industries, while diversity and competition encourages employment growth. On a lower level of aggregation, specialization and diversity decreases employment growth in urban industries, while the effects of competition remain... (More)
What are the effects of regional specialization, industrial diversity, and local competition on industrial growth? Utilizing a novel dataset on the Swedish manufacturing industry, 1896-1910, an OLS model is estimated that captures the relationship between dynamic agglomeration externalities, i.e. knowledge spillovers, and employment growth in industries located in cities. The main results are that on a high level of industrial aggregation, specialization is associated with lower successive employment growth in urban industries, while diversity and competition encourages employment growth. On a lower level of aggregation, specialization and diversity decreases employment growth in urban industries, while the effects of competition remain positive. A plausible interpretation is that while inter-industrial externalities were important between broadly defined industries, disaggregated industries benefited from proximity to other dissimilar dominant industries. Thus, there is little support for the notion of Marshall (1890), Arrow (1962), and Romer (1986), that intra-industrial externalities are an important determinant of growth, while there is support, although somewhat inconclusive, for the notion of Jacobs (1969) that diversity and competition encourages industrial growth. (Less)
Please use this url to cite or link to this publication:
author
Berger, Thor LU
supervisor
organization
course
EKHK02 20111
year
type
M2 - Bachelor Degree
subject
keywords
Industrialization, externalities, endogenous growth theory, MAR, Jacobs, OLS
language
English
id
1974177
date added to LUP
2011-06-09 12:45:31
date last changed
2011-06-09 12:45:31
@misc{1974177,
  abstract     = {What are the effects of regional specialization, industrial diversity, and local competition on industrial growth? Utilizing a novel dataset on the Swedish manufacturing industry, 1896-1910, an OLS model is estimated that captures the relationship between dynamic agglomeration externalities, i.e. knowledge spillovers, and employment growth in industries located in cities. The main results are that on a high level of industrial aggregation, specialization is associated with lower successive employment growth in urban industries, while diversity and competition encourages employment growth. On a lower level of aggregation, specialization and diversity decreases employment growth in urban industries, while the effects of competition remain positive. A plausible interpretation is that while inter-industrial externalities were important between broadly defined industries, disaggregated industries benefited from proximity to other dissimilar dominant industries. Thus, there is little support for the notion of Marshall (1890), Arrow (1962), and Romer (1986), that intra-industrial externalities are an important determinant of growth, while there is support, although somewhat inconclusive, for the notion of Jacobs (1969) that diversity and competition encourages industrial growth.},
  author       = {Berger, Thor},
  keyword      = {Industrialization,externalities,endogenous growth theory,MAR,Jacobs,OLS},
  language     = {eng},
  note         = {Student Paper},
  title        = {Agglomeration Externalities and Growth in Urban Industries - empirical evidence from Sweden, 1896-1910},
  year         = {2011},
}