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How local are spatial density externalities? Neighbourhood effects in agglomeration economies
Jönköping University, Jönköping International Business School, JIBS, Economics. Jönköping University, Jönköping International Business School, JIBS, Centre of Excellence for Science and Innovation Studies (CESIS). Centre for Innovation, Research and Competence in the Learning Economy (CIRCLE), Lund University.
Jönköping University, Jönköping International Business School, JIBS, Economics. Jönköping University, Jönköping International Business School, JIBS, Centre for Entrepreneurship and Spatial Economics (CEnSE).
Jönköping University, Jönköping International Business School, JIBS, Economics.
2016 (English)In: Regional studies, ISSN 0034-3404, E-ISSN 1360-0591, Vol. 50, no 6, 1082-1095 p.Article in journal (Refereed) Published
Abstract [en]

The geographic scale at which density externalities operate is analysed in this paper. Using geocoded high-resolution data, the analysis is focused on exogenously determined within-city squares (‘neighbourhoods’) of 1 km2. The analysis confirms a city-wide employment density–wage elasticity and an economically significant density–wage elasticity at the neighbourhood level that attenuate sharply with distance. Panel estimates over 20 years suggest a neighbourhood density–wage elasticity of about 3%, while the city-wide elasticity is about 1%. It is argued that the neighbourhood level is more prone to capture learning, e.g. through knowledge and information spillovers. This interpretation is supported by (1) significantly larger neighbourhood elasticities for university educated workers and (2) sharper attenuation with distance of the effect for such workers.

Place, publisher, year, edition, pages
2016. Vol. 50, no 6, 1082-1095 p.
Keyword [en]
Agglomeration externalities; Density; External scale economies; Geocoded data; Modifiable areal unit problem (MAUP); Productivity; Spatial dependence; Spatial scale; Sweden; Wages
National Category
Economics and Business
Identifiers
URN: urn:nbn:se:hj:diva-23658DOI: 10.1080/00343404.2014.968119ISI: 000374629700012Scopus ID: 2-s2.0-84908439746OAI: oai:DiVA.org:hj-23658DiVA: diva2:708885
Note

Theme Issue: Environmental Governance of Urban and Regional Development.

Included in doctoral thesis as a manuscript: "How local are Spatial Density Externalities? – Evidence from Square Grid Data".

Available from: 2014-03-31 Created: 2014-03-31 Last updated: 2016-12-07Bibliographically approved
In thesis
1. Nonmarket Interactions and Density Externalities
Open this publication in new window or tab >>Nonmarket Interactions and Density Externalities
2014 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

The four individual papers in this thesis all explore some aspect of the relationship between productivity and the density of economic activity.

The first paper (co-authored with Martin Andersson, and Johan Klaesson) establishes the general relationship between regional density and average labor productivity; a relationship that is particularly strong for workers in interactive professions. In the paper, we also caution that much of the observed differences are not causal effects of density, but driven by sorting of actors to

dense environments.

Paper number two (co-authored with Martin Andersson, and Johan Klaesson) addresses the attenuation of density externalities with space. Using data on the neighborhood-level, and information on first- and second-order neighboring areas, we conclude that the neighborhood effects are stronger for highly educated workers, and that the attenuation of the effect is sharp.

In the third paper, I estimate an individual-level wage equation to assess appropriate levels of aggregation when analyzing density externalities. I conclude that failure to use data on the neighborhood level will severely understate the  benefits of working in the central parts of modern cities.

The fourth paper departs from the conclusions of the previous chapters, and asks whether firms position themselves to benefit from density externalities. Judging by job switching patterns, the attenuation of density externalities are a real issue for the metropolitan workforce. Employees, especially those in interactive professions, tend to move short distances between employers, consistent with clustering to take advantage of significant but sharply attenuating human capital externalities.

Place, publisher, year, edition, pages
Jönköping: Jönköping International Business School, 2014. 170 p.
Series
JIBS Dissertation Series, ISSN 1403-0470 ; 096
National Category
Economics and Business
Identifiers
urn:nbn:se:hj:diva-23661 (URN)978-91-86345-51-8 (ISBN)
Public defence
2014-04-11, B1014, Jönköping, 10:00 (English)
Opponent
Supervisors
Available from: 2014-03-31 Created: 2014-03-31 Last updated: 2014-03-31Bibliographically approved

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