9 - Empirical Evidence of Agglomeration Flashcards
what did Henderson and Nakamura find regarding agglomeration economies?
significant evidence for localisation economies in manufactoring industries and little evidence for urbanisation economies
how to measure localisation economies?
analyzing establishments births within zip code areas and proximity to employment concentrations
what ist he concept of vertical disintegration as studied by Holmes (1999)?
firms in higly localized areas are more likely to outsource inputs to specialized suppliers, increasing “purchased-inputs intensity”
what the impact of a population’s size on productivity?
according Rosenthal and Strange (2004)
doubling a city’s population typically increases worker productivity by 3-8%
what is Functional Specialisation, according Duranton & Puga (2005)
a shift where larger cities focus on managerial industries while smaller cities focus on production, influenced by lower communication costs
how does cities affect wage rates?
cities increase wages by abt 33%, partly due to KS and enhances HC accumulation
What role do “Power Couples” play in urbanisation?
highly-educated couples increasingly concentrate in cities where both partners can find suitable employment, supporting urbanisation economies in larger citites
what did Nakamura discover about industry size and productivity?
doubling the industry size results in 4,5% productivity increase
doubling the city size results in 3,4% productivity increase
why is measuring loc & urb Econ important?
for testing the theories on how city size and industry concentration affect productivity, employment and economic growth
what findings abt distance and localisation economies?
Localisation Ec. decline with distance, showing a stronger effect within the first mile compared to further away
how do non-traded inputs benefit firms in agglomeration?
access to specialized suppliers, allowing them to focus on core activities and outsource specific needs
what does “purchased-inputs intensitiy” indicate in agglomeration studies
the extent to which firms rely on external suppliers, tending to be higher in areas with strong industry concentration
what’s the role of HQ in urbanisation economies?
HQ’s require diverse non-industry-sepcific business services which large cities can offer (like legal and advertising)
what is the urban wage premium and its primary cause?
higher wages in cities due to productivity boots from agglomeration effects and HC accumulation
what is the relationship between a city’s density and single people’s location choices, according to Gautier et al. (2010)?
single people drawn to higher density cities, increasing the likelihood of meeting partners, increasing housing premium
