Measures of urban productivity are typically positivelyassociated with city population. But is this relationship causal? Wediscuss the main sources of bias in the proper identification of agglomerationeffects. We also assess a variety of solutions that have beenproposed in the literature to deal...

Firms are more productive on average in larger cities. Two explanations have been offered:agglomeration economies (larger cities promote interactions that increase productivity) and firmselection (larger cities toughen competition allowing only the most productive to survive). Todistinguish...