Nothing Special   »   [go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/taf/specan/v2y2007i1p65-90.html
   My bibliography  Save this article

Local Economic Structure and Growth

Author

Listed:
  • Rita Almeida
Abstract
Abstract This paper tests how the local economic structure—measured by local sector specialization, competition and diversity—affects growth of manufacturing sectors. Most of the empirical literature assumes that in the long run more productive regions will attract more workers and use employment growth as a measure of local productivity growth. However, this approach is based on strong assumptions, such as those of national labour markets and homogeneous labour. This paper shows that if we relax these assumptions, regional adjusted wage growth is a better measure of productivity growth than employment growth. This measure is used in order to study regional growth in Portuguese regions between 1985 and 1994. Evidence is found of MAR externalities in some sectors and no evidence of Jacobs or Porter externalities in most of the sectors. These results are at odds with the findings for employment-based regressions, which show that regional concentration and the region's size have a negative effect in most of the sectors. It is also shown that simply using regional wage growth would overstate the effect of regional concentration and competition on long-run growth.

Suggested Citation

  • Rita Almeida, 2007. "Local Economic Structure and Growth," Spatial Economic Analysis, Taylor & Francis Journals, vol. 2(1), pages 65-90.
    • Handle: RePEc:taf:specan:v:2:y:2007:i:1:p:65-90
    DOI: 10.1080/17421770701232442
    as

    Download full text from publisher

    File URL: http://www.taylorandfrancisonline.com/doi/abs/10.1080/17421770701232442
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/17421770701232442?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. Zvi Griliches, 1998. "Productivity, R&D, and the Data Constraint," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 347-374, National Bureau of Economic Research, Inc.
    3. Paul Krugman & Anthony J. Venables, 1995. "Globalization and the Inequality of Nations," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(4), pages 857-880.
    4. Adam B. Jaffe & Manuel Trajtenberg & Rebecca Henderson, 1993. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 108(3), pages 577-598.
    5. Gao, Ting, 2004. "Regional industrial growth: evidence from Chinese industries," Regional Science and Urban Economics, Elsevier, vol. 34(1), pages 101-124, January.
    6. Fujita,Masahisa & Thisse,Jacques-François, 2013. "Economics of Agglomeration," Cambridge Books, Cambridge University Press, number 9781107001411, October.
    7. Henderson, Vernon & Kuncoro, Ari & Turner, Matt, 1995. "Industrial Development in Cities," Journal of Political Economy, University of Chicago Press, vol. 103(5), pages 1067-1090, October.
    8. Federico Cingano & Fabiano Schivardi, 2004. "Identifying the Sources of Local Productivity Growth," Journal of the European Economic Association, MIT Press, vol. 2(4), pages 720-742, June.
    9. Ciccone, Antonio & Hall, Robert E, 1996. "Productivity and the Density of Economic Activity," American Economic Review, American Economic Association, vol. 86(1), pages 54-70, March.
    10. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    11. Glaeser, Edward L & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1992. "Growth in Cities," Journal of Political Economy, University of Chicago Press, vol. 100(6), pages 1126-1152, December.
      • Edward L. Glaeser & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1991. "Growth in Cities," NBER Working Papers 3787, National Bureau of Economic Research, Inc.
      • Glaeser, Edward Ludwig & Kallal, Hedi D. & Scheinkman, Jose A. & Shleifer, Andrei, 1992. "Growth in Cities," Scholarly Articles 3451309, Harvard University Department of Economics.
    12. Henderson, J. Vernon, 2003. "Marshall's scale economies," Journal of Urban Economics, Elsevier, vol. 53(1), pages 1-28, January.
    13. K. J. Arrow, 1971. "The Economic Implications of Learning by Doing," Palgrave Macmillan Books, in: F. H. Hahn (ed.), Readings in the Theory of Growth, chapter 11, pages 131-149, Palgrave Macmillan.
    14. Wagner, Alfred, 1891. "Marshall's Principles of Economics," History of Economic Thought Articles, McMaster University Archive for the History of Economic Thought, vol. 5, pages 319-338.
    15. Combes, Pierre-Philippe, 2000. "Economic Structure and Local Growth: France, 1984-1993," Journal of Urban Economics, Elsevier, vol. 47(3), pages 329-355, May.
    16. de Lucio, Juan J. & Herce, Jose A. & Goicolea, Ana, 2002. "The effects of externalities on productivity growth in Spanish industry," Regional Science and Urban Economics, Elsevier, vol. 32(2), pages 241-258, March.
    17. repec:hhs:iuiwop:430 is not listed on IDEAS
    18. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yimin Chen & Yulin Liu & Xin Fang, 2021. "The new evidence of China’s economic downturn: From structural bonus to structural imbalance," PLOS ONE, Public Library of Science, vol. 16(9), pages 1-25, September.
    2. Robert Lehmann, 2016. "Economic Growth and Business Cycle Forecasting at the Regional Level," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 65.
    3. Tavassoli, Sam & Obschonka, Martin & Audretsch, David B., 2021. "Entrepreneurship in Cities," Research Policy, Elsevier, vol. 50(7).
    4. Reinhold Kosfeld & Timo Mitze, 2020. "The role of R&D-intensive clusters for regional competitiveness," MAGKS Papers on Economics 202001, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    5. Rita Almeida & Ana M. Fernandes, 2013. "Explaining local manufacturing growth in Chile: the advantages of sectoral diversity," Applied Economics, Taylor & Francis Journals, vol. 45(16), pages 2201-2213, June.
    6. R. Paci & S. Usai, 2006. "Agglomeration economies and growth-The case of Italian local labour systems, 1991-2001," Working Paper CRENoS 200612, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    7. B. Fingleton & P. Cheshire & H. Garretsen & D. Igliori & P. McCann & J. McCombie & V. Monastiriotis & B. Moore & M. Roberts, 2007. "Editorial," Spatial Economic Analysis, Taylor & Francis Journals, vol. 2(1), pages 1-5.
    8. Reinhold Kosfeld & Timo Mitze, 2023. "Research and development intensive clusters and regional competitiveness," Growth and Change, Wiley Blackwell, vol. 54(4), pages 885-911, December.
    9. Alexander Cordes, 2012. "What Drives Skill-biased Regional Employment Growth in West Germany?," Chapters, in: Knut Ingar Westeren (ed.), Foundations of the Knowledge Economy, chapter 11, Edward Elgar Publishing.
    10. Kutsenko, E., 2012. "Path Dependence in Spatial Distribution of Economic Activity: Bad News for Empiric Research of Agglomeration Effects," Journal of the New Economic Association, New Economic Association, vol. 14(2), pages 10-26.
    11. Jan Kluge & Robert Lehmann, 2013. "Marshall or Jacobs? New insights from an interaction model," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 33(2), pages 107-133, October.
    12. Thulin, Per, 2009. "Labor Mobility, Knowledge Diffusion And Regional Growth," Working Paper Series in Economics and Institutions of Innovation 209, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    13. Kejun Song & Gerald Simons & Wei Sun, 2019. "Knowledge Spillovers and Local Industry Growth: A Patent Citation Approach," The American Economist, Sage Publications, vol. 64(1), pages 60-72, March.
    14. Luca Romagnoli & Paola Di Renzo & Luigi Mastronardi, 2022. "Modelling Income Drivers in Peripheral Municipalities: The Case of Italian Inner Areas," Sustainability, MDPI, vol. 14(22), pages 1-16, November.
    15. B. Fingleton & S. Brakman & P. Cheshire & H. Garretsen & D. Igliori & J. Le Gallo & P. McCann & J. McCombie & V. Monastiriotis & M. Roberts, 2007. "Editorial," Spatial Economic Analysis, Taylor & Francis Journals, vol. 2(2), pages 111-115.
    16. Miralles-Quirós, María del Mar & Miralles-Quirós, José Luis & Daza-Izquierdo, Julio, 2018. "Crecimiento empresarial y políticas públicas de desarrollo regional en EUROACE," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 41, pages 215-225.
    17. Raimund Krumm & Harald Strotmann, 2013. "The impact of regional location factors on job creation, job destruction and employment growth in manufacturing," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 33(1), pages 23-48, February.
    18. Khoirunurrofik, 2018. "Local economic structure, productivity growth, and industry life cycle: evidence from Indonesia," Asia-Pacific Journal of Regional Science, Springer, vol. 2(2), pages 453-475, August.
    19. Noor Fauziah Isnaeni & Khoirunurrofik Khoirunurrofik, 2021. "The effect of knowledge spillovers and human capital through technological intensity on employment growth in Indonesia," Asia-Pacific Journal of Regional Science, Springer, vol. 5(1), pages 21-39, February.
    20. Raimund Krumm & Harald Strotmann, 2010. "The Impact of Regional Supply and Demand Conditions on Job Creation and Destruction," IAW Discussion Papers 61, Institut für Angewandte Wirtschaftsforschung (IAW).
    21. Marco Percoco, 2017. "Impact of European Cohesion Policy on regional growth: does local economic structure matter?," Regional Studies, Taylor & Francis Journals, vol. 51(6), pages 833-843, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rita Almeida & Ana M. Fernandes, 2013. "Explaining local manufacturing growth in Chile: the advantages of sectoral diversity," Applied Economics, Taylor & Francis Journals, vol. 45(16), pages 2201-2213, June.
    2. Beaudry, Catherine & Schiffauerova, Andrea, 2009. "Who's right, Marshall or Jacobs? The localization versus urbanization debate," Research Policy, Elsevier, vol. 38(2), pages 318-337, March.
    3. Duranton, Gilles & Puga, Diego, 2014. "The Growth of Cities," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 5, pages 781-853, Elsevier.
    4. Giulio Cainelli & Roberto Ganau & Donato Iacobucci, 2016. "Do Geographic Concentration and Vertically Related Variety Foster Firm Productivity? Micro-Evidence from Italy," Growth and Change, Wiley Blackwell, vol. 47(2), pages 197-217, June.
    5. Martin, Philippe & Mayer, Thierry & Mayneris, Florian, 2011. "Spatial concentration and plant-level productivity in France," Journal of Urban Economics, Elsevier, vol. 69(2), pages 182-195, March.
    6. Mion, Giordano, 2004. "Spatial externalities and empirical analysis: the case of Italy," Journal of Urban Economics, Elsevier, vol. 56(1), pages 97-118, July.
    7. Combes, Pierre-Philippe & Gobillon, Laurent, 2015. "The Empirics of Agglomeration Economies," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 247-348, Elsevier.
    8. S. Deidda & R. Paci & S. Usai, 2002. "Spatial Externalities and Local Economic Growth," Working Paper CRENoS 200206, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    9. SHARMA Anand, 2017. "Dynamic Externalities And Regional Manufacturing Growth: Evidence From India," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 12(1), pages 185-201, April.
    10. Stef Proost & Jacques-François Thisse, 2019. "What Can Be Learned from Spatial Economics?," Journal of Economic Literature, American Economic Association, vol. 57(3), pages 575-643, September.
    11. Henry Overman & Patricia Rice & Anthony Venables, 2010. "Economic Linkages across Space," Regional Studies, Taylor & Francis Journals, vol. 44(1), pages 17-33.
    12. Li, Dongya & Lu, Yi & Wu, Mingqin, 2012. "Industrial agglomeration and firm size: Evidence from China," Regional Science and Urban Economics, Elsevier, vol. 42(1-2), pages 135-143.
    13. Eri Yamada & Tetsu Kawakami, 2015. "Assessing dynamic externalities from a cluster perspective: the case of the motor metropolis in Japan," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 54(1), pages 269-298, January.
    14. Gao, Ting, 2004. "Regional industrial growth: evidence from Chinese industries," Regional Science and Urban Economics, Elsevier, vol. 34(1), pages 101-124, January.
    15. Emanuela Marrocu & Raffaele Paci & Stefano Usai, 2013. "Productivity Growth In The Old And New Europe: The Role Of Agglomeration Externalities," Journal of Regional Science, Wiley Blackwell, vol. 53(3), pages 418-442, August.
    16. Delgado, Mercedes & Porter, Michael E. & Stern, Scott, 2014. "Clusters, convergence, and economic performance," Research Policy, Elsevier, vol. 43(10), pages 1785-1799.
    17. Stéphane Riou, 2003. "Géographie, croissance et politique de cohésion en Europe," Revue Française d'Économie, Programme National Persée, vol. 17(3), pages 171-220.
    18. Cainelli, Giulio & Lupi, Claudio, 2008. "Does Spatial Proximity Matter? Micro-evidence from Italy," Economics & Statistics Discussion Papers esdp08042, University of Molise, Department of Economics.
    19. Jens Suedekum & Uwe Blien, 2005. "Local Economic Structure and Industry Development in Germany, 1993-2001," Economics Bulletin, AccessEcon, vol. 15(17), pages 1-8.
    20. Combes, Pierre-Philippe & Overman, Henry G., 2004. "The spatial distribution of economic activities in the European Union," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 64, pages 2845-2909, Elsevier.

    More about this item

    Keywords

    Local growth; knowledge spillovers; productivity; O47; R11; R12;
    All these keywords.

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:specan:v:2:y:2007:i:1:p:65-90. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RSEA20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.