Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/87408
Authors: 
Brunow, Stephan
Nijkamp, Peter
Year of Publication: 
2013
Series/Report no.: 
Tinbergen Institute Discussion Paper 13-134/VIII
Abstract: 
In the presence of agglomeration economies one might expect a relocation and concentration of industries. Then firm start-up activities may be assumed to reveal those effects. We introduce an empirical testable model inspired by the New Economic Geography and human capital externalities literature. The novelty of this paper is that it derives a measure of agglomeration economies founded on microeconomic analysis based on households' and firms' maximization behavior, namely the real market potential. Besides agglomeration forces, dispersion and human capital effects can be separated and explicitly controlled for. The paper sheds new light on the general mechanisms of intra-industrial agglomeration forces because it explicitly considers the regional distribution of economic activities. It offers clear evidence for the empirical relevance of the New Economic Geography.
Subjects: 
New Economic Geography
Agglomeration
Externalities
Firm Formation
JEL: 
L13
O41
R11
R3
Document Type: 
Working Paper

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