Is there a limit to agglomeration? Evidence from productivity of Dutch firms

Rizov, Marian and Oskam, Arie and Walsh, Paul (2012) Is there a limit to agglomeration? Evidence from productivity of Dutch firms. Regional Science and Urban Economics, 42 (4). pp. 595-606. ISSN 0166-0462

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Is there a limit to agglomeration? Evidence from productivity of Dutch firms

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Abstract

We compute aggregate productivity of three categories of regions, classified by the level of urbanization and
density of economic activity in the Netherlands, from firm-specific total factor productivity (TFP) measures.
TFP measures are estimated by a semi-parametric algorithm, within 2-digit industries, covering agriculture,
manufacturing, construction, trade and services, using AMADEUS data over the period 1997–2006. We
analyse the productivity differentials across urbanization categories by decomposing them into industry
productivity effect and industry composition effect. Our analysis indicates that there is non-linear net effect
of agglomeration on productivity growth but in levels agglomeration is associated with higher productivity.

Keywords:Agglomeration, Factor prices, Total factor productivity, Structural estima, The Netherlands
Subjects:L Social studies > L140 Econometrics
L Social studies > L721 Economic Geography
L Social studies > L110 Applied Economics
Divisions:Lincoln International Business School
ID Code:19046
Deposited On:16 Oct 2015 08:21

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