A prominent feature of economic geography in America is the positive correlation amongst local incomes, housing costs and city population. This paper embeds a "black box" agglomeration economy within a more neoclassical general equilibrium model of local wages, rents and population to assess the...

We propose an integrated framework to discuss the empirical literature on the local determinants of agglomeration effects. We start by presenting the theoretical mechanisms that ground individual and aggregate empirical specifications. We gradually introduce static effects, dynamic effects, and...

In this paper we study the dynamics of local employment growth in West Germany from 1980 to 2001. Using dynamic panel techniques, we analyse the timing of the impact of diversity and specialisation, as well as of the human capital structure of local industries. Diversity has a positive effect on...

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

Using administrative data for West Germany, this paper investigates whether part of the urban wage premium stems from fierce competition in thick labour markets. We first establish that employers possess less wage-setting power in denser markets. Local differences in wage-setting power predict...

This paper examines the role of regional aggregation in measuring agglomeration externalities. Using Dutch administrative data, we define local labour markets (LLMs) based on the worker's commuting outcomes, gender and educational attainment, and show that high-educated workers and male workers...

The direct impact of local public goods on welfare is relatively easy to measure from land rents. However, the indirect effects on home and job location, on land use, and on agglomeration benefits are hard to pin down. We develop a spatial general equilibrium model for the valuation of these...

We ask whether local agglomeration affects how recessions impact on entrepreneurship by comparing the probability of being an entrepreneur before and after the Great 2008 Recession in local labour markets where industrial districts are present and in comparable areas. Using Italian Labour Force...

The division of labor between and within countries is driven by two fundamental forces, comparative advantage and increasing returns. We set up a simple Ricardian model with a Marshallian input sharing mechanism to study their interplay. The key insight that emerges is that the interaction...

This paper exploits time and geographic variation in the adoption of Special Economic Zones in India to assess the direct and spillover effects of the program. We combine geocoded firm-level data and geocoded SEZs using a concentric ring approach, thus creating a novel dataset of firms with...