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

M. Rizov, A.J. Oskam, P. Walsh

Research output: Contribution to journalArticleAcademicpeer-review

19 Citations (Scopus)

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.
Original languageEnglish
Pages (from-to)595-606
JournalRegional Science and Urban Economics
Volume42
Issue number4
DOIs
Publication statusPublished - 2012

Keywords

  • regional labor productivity
  • monopolistic competition
  • economic-geography
  • fixed costs
  • model
  • level
  • diversity
  • selection
  • dynamics
  • cities

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