A Companion to Urban Economics by Richard J. Arnott, Daniel P. McMillen

By Richard J. Arnott, Daniel P. McMillen

A better half to city Economics offers a cutting-edge review of this box, speaking its highbrow richness via a various portfolio of authors and issues.

  • Unique in either its rigor and overseas treatment
  • An excellent supplementary textbook in upper-level undergraduate city economics classes, or in master's point classes, delivering scholars with the required origin to take on extra complicated issues in city economics
  • Contains contributions from the world’s best city economists

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4. Finally, Rosenthal and Strange (2003) examine the location decisions of new plants in a model of plant births. The intuition is that if agglomeration enhances productivity, additional plants will be drawn to agglomerated areas. The key findings are that diversity attracts new arrivals, and that localization economies are more important than urbanization economies for the six industries studied. It is important to recognize that in all of the studies discussed above it is difficult to be certain about causality.

Although this is an activity that could ACTC01 7 18/04/2006, 12:19PM S. S. 1 ACTC01 8 AND W. C. STRANGE Employment in the wine (SIC 2084) and computer software (SIC 7371–3, 7375) industries. 18/04/2006, 12:20PM THE MICRO-EMPIRICS OF AGGLOMERATION ECONOMIES 9 seemingly take place anywhere, it is clear from the figures that it does not. Once again, most of the country has little employment in these industries, while a relatively small number of counties account for a large fraction of software development.

Although not conclusive by itself, this is consistent with the idea that firms benefit much more from own-industry activity in the immediate area than from activity farther away. In a recent paper, Rosenthal and Strange (2003) examine this issue as part of their effort to provide a micro-level analysis of the geographical scope of agglomeration economies. 2. This makes it possible to measure total employment and own-industry employment within a certain distance of an employer. Using these measures, it is possible to calculate the effects of the local environment on the number of firm births and on these new firms’ employment levels for six industries (computer software, apparel, food processing, printing and publishing, machinery, and fabricated metals).

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