2009/04 | LEM Working Paper Series | |
Spatial Localization in Manufacturing: A Cross-Country Analysis |
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Stefania Vitali, Mauro Napoletano, Giorgio Fagiolo |
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Keywords | ||
Industry Localization; Manufacturing Industries; Localization Indices; Spatial Concentration; Spatial correlation; Cross-country studies
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JEL Classifications | ||
R12, R3
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Abstract | ||
This paper employs a homogenous firms database to investigate industry
localization in European countries. More specifically, we compare,
across industries and countries, the predictions of two of the most
popular localization indices, i.e., the Ellison and Glaeser (1997)
index and the Duranton and Overman (2005) index. We find that,
independently from the index used, localization is a pervasive
phenomenon in all countries studied, but the degree of localization is
very uneven across industries in each country. Furthermore, we find
that the two indices significantly diverge in predicting the intensity
of the forces generating localization within each industry. Finally,
we perform a cross-sectoral analysis of localized industries. We show
that, in all countries, localized sectors are mainly ``traditional''
sectors (like jewelery, wine, and textiles) and sectors where scale
economies are important. However, once one controls for countries'
industrial structures science-based sectors turn out to be the most
localized ones. |
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