Working Paper: NBER ID: w21452
Authors: Gilles Duranton; William R. Kerr
Abstract: This review discusses frontier topics in economic geography as they relate to firms and agglomeration economies. We focus on areas where empirical research is scarce but possible. We first outline a conceptual framework for city formation that allows us to contemplate what empiricists might study when using firm-level data to compare the functioning of cities and industries with each other. We then examine a second model of the internal structure of a cluster to examine possibilities with firm-level data for better exposing the internal operations of clusters. An overwhelming theme of our review is the vast scope for enhancements of our picture of agglomeration with the new data that are emerging.
Keywords: Agglomeration Economies; Economic Geography; Firm-Level Data; Urban Productivity; Clusters
JEL Codes: J2; J6; L1; L2; L6; O1; O3; R10; R3
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Agglomeration economies (R11) | Firm productivity (D21) |
| Economic activity (E29) | Firm productivity (D21) |
| Economic activity (E29) | Wages (J31) |
| Firm interactions (L14) | Firm productivity (D21) |
| Knowledge spillovers (O36) | Firm productivity (D21) |
| Labor pooling (J68) | Firm productivity (D21) |