marshall s scale economies using panel data this paper estimates plant level production functions for machinery and high tech industries that allow for scale externalities from other plants in the same industry locally and from the scale or diversity of local economic activity outside the own industry the paper finds that the count of other own industry plants representing a count of local information spillover sources has strong productivity effects in high tech but not machinery industries single plant firms both benefit more from and generate greater external benefits than corporate plants given their greater reliance on external environments on dynamic externalities high tech single plant firms benefit also from the scale of past own industry activity i find little evidence of economies from the diversity or scale of local economic activity outside the own industry

variable returns to agglomeration and the effect of road traffic congestion abstract this paper investigates the links between returns to urban density productivity and road traffic congestion a generalised translog production inverse input demand function is estimated to test for the existence of variable returns to agglomeration in manufacturing construction and service industries two separate measures of urban density in which proximity is represented by straight line distance or by generalised cost are constructed and included in the translog to identify the effect of road traffic congestion the results show that for some sectors of the economy diminishing returns to urban density can set in causing the magnitude of agglomeration elasticity to fall as effective densities increase the generalised cost based measure of agglomeration produces higher elasticities because it captures both time and distance dimensions of density a comparison of spatial variance in estimates indicates that road traffic congestion plays an important role in explaining diminishing returns for the most highly urbanised locations

agglomeration economies and industrial decentralization the wage productivity trade offs abstract this paper examines the industrial location trade offs between the productivity advantages of the metropolitan center and the lower land and the labor costs in outlying regions within the state of sao paulo brazil the results indicate that while plant productivity is enhanced by the considerable agglomeration economies existing within metropolitan sao paulo firms must pay for these benefits in high wages and land costs offsetting labor cost savings can be achieved by locating in outlying regions the evidence presented in this paper suggests that market forces may lead eventually to a spontaneous decentralization of industry

the role of underground storage in the dynamics of the us natural gas market a threshold model analysis abstract natural gas is an important source of energy in the global economy hence understanding the drivers of its prices is of significant interest for the many economic agents this paper investigates the role of inventories for the dynamics of the u s natural gas market our contribution is twofold first within the threshold structural var framework we demonstrate that in a low inventory regime spot prices are more responsive to economic fundamentals in comparison to situation in which the inventories are high second we present evidence that the level of natural gas inventories have a significant effect on the relationship between spot and futures prices

geography industrial organization and agglomeration this paper makes two contributions to the empirical literature on agglomeration economies first the paper uses a unique and rich database in conjunction with mapping software to measure the geographic extent of agglomerative externalities previous papers have been forced to assume that agglomeration economies are club goods that operate at a metropolitan scale second the paper tests for the existence of organizational agglomeration economies of the kind studied qualitatively by saxenian 1994 this is a potentially important source of increasing returns that previous empirical work has not considered results indicate that localization economies attenuate rapidly and that industrial organization affects the benefits of agglomeration

spatial evolution of the computer industry in the usa abstract this paper examines the spatial evolution of computers across 317 metro areas in the usa since the introduction of the personal computer we start by examining the relative distribution of employment across cities examining how that distribution changes in 1977 1992 and how cities move through the distribution for computers transition matrices are stationary with the industry exhibiting no tendency to settle down nor any tendency of retrenchment during periods of national high tech employment decline there is no tendency of the relative size distribution of computer employment to collapse go bimodal etc overall computers exhibit some turbulence with dramatic big winners and losers among cities as well as persistence for some cities in employment shares in attracting or repelling an industry urban heterogeneity is important large well educated cities near san jose have a much greater chance of attracting high tech employment much lower mean first passage times moving up states and less chance of losing it in assessing the determinants of persistence in local employment patterns we examine sources of productivity growth we find strong evidence of significant dynamic own industry externalities for single plant firms and little evidence of urbanization jacobs knowledge type externalities corporate plants in computers seem to be self reliant and not really influenced by externalities

forward curves scarcity and price volatility in oil and natural gas markets the role of inventory in explaining the shape of the forward curve and spot price volatility in commodity markets is central in the theory of storage developed by kaldor kaldor n 1939 speculation and economic stability the review of economic studies 7 1 27 and working working h 1949 the theory of the price of storage american economic review 39 1254 1262 and has since been documented in a vast body of financial literature including the reference paper by fama and french fama e f and k r french 1987 commodity futures prices some evidence on forecast power premiums and the theory of storage journal of business 60 55 73 on metals the goal of this paper is twofold i validate in the case of oil and natural gas the use of the slope of the forward curve as a proxy for inventory the slope being defined in a way that filters out seasonality ii analyze directly for these two major commodities the relationship between inventory and price volatility in agreement with the theory of storage we find that i the negative correlation between price volatility and inventory is globally significant for crude oil ii this negative correlation prevails only during those periods of scarcity when the inventory is below the historical average and increases importantly during the winter periods for natural gas our results are illustrated by the analysis of a 15 year database of us oil and natural gas prices and inventory

dynamic steam coal market integration evidence from rolling cointegration analysis abstract the aim of the paper is twofold first to assess the dynamics of the integration process of the international steam coal prices and second to investigate the changes in the roles of particular coal prices in this market in the light of changes in the structure of supply and demand the analysis is based on steam coal prices set by the largest world exporters and importers on both the atlantic and the pacific markets we use weekly data spanning from october 5 2001 to march 28 2014 the aim is achieved in two stages during the first one we use the rolling trace test to identify the integration of the steam coal market and during the second one we apply the rolling weak exogeneity test to determine the roles of the participants of the international steam coal market namely price setters and price takers our main findings can be summarized in two observations firstly the main world steam coal prices are integrated and during the period when freight costs are higher the coal market integration is weaker and when the costs are lower the integration is stronger secondly the role of particular coal prices is not stable in time generally price setters appear in the market which covers greater shares in the physical coal trade although indonesia and russia have a great share in the global export their prices remain price takers during the whole period as a consequence although russia remains the largest coal exporter of the steam coal to the european market it cannot dictate its prices in this market

industrial diversification and city size the case of yugoslavia the theoretical explanation for the industrial diversification city size relationship is studied as an explanation on the basis of variation in factor prices is not adequate attention is paid to

a dynamic interregional theory of migration and population growth the authors attempt to bring the theory of regional amenity value determination together with a theoretical framework on migration to form a cohesive theoretical model they build on previous efforts to do this by introducing factors such as the housing market and determination of the equilibrium level of real full income the implied geographical focus is on the united states annotation

urban wages and labor market agglomeration abstract using the 5 public use micro sample of the 1990 u s census we find that observationally equivalent workers in the manufacturing sector earn higher wages when they are in urban labor markets that have a larger share of national or metropolitan employment in their same occupation and industry groups quantitatively the effect is large with an elasticity measured at the means of between 1 2 and 3 6 for these effects we interpret the willingness of firms to pay more for equivalent workers in dense markets as evidence of an agglomeration economy in urban labor

a theory of urban growth in an economy experiencing endogenous economic growth and exogenous population growth we explore two main themes how urbanization affects efficiency of the growth process and how growth affects patterns of urbanization localized information spillovers promote agglomeration and human capital accumulation fosters endogenous growth individual city sizes grow with local human capital accumulation and knowledge spillovers and city numbers generally increase which we demonstrate is consistent with empirical evidence we analyze whether local governments can successfully internalize local dynamic externalities in addition we explore how growth involves real income differences across city types and how urbanization can foster income inequality most nonagricultural production in developed countries occurs in metropolitan areas the underlying reasons why economic activity agglomerates into cities localized information and knowledge spillover also make cities the engines of economic growth in an we gratefully acknowledge support of the national science foundation grants sbr 9422440 and sbr9730142 for this research the work has benefited from conversations with harl ryder on the dynamics of the model and from comments by gilles duranton and participants in seminars at brown colorado and texas austin and a presentation at an isit seminar sponsored by the centre for economic policy research and the national bureau of economic research

intra metropolitan productivity variations of selected manufacturing and business service sectors what can we learn from los angeles this paper explores an empirical issue the extent to which access to various labour skills and other economic activity in los angeles can explain observed intra urban variations in productivity of selected manufacturing and business service sectors in addressing this issue an empirical model is developed based on traditional location theory and productivity methodologies the empirical results indicate that the influence of skilled labour access on firm productivity is stronger than the influence of access to other firms in the metropolitan area thus employment decentralisation is the rational response of firms to the residential choices of a skilled labour force the findings raise questions about the mobility of labour within metropolitan areas and the impact of policies that would improve the mobility of less skilled labour between central cities and the suburban employment centres

productivity and city size a critique of the evidence a critique of two leading articles in the productivity and city size literature results in revised estimates of the productivity advantages of large cities in particular extant estimates of the elasticity of productivity with city size are revised downward by over 100 percent for the manufacturing sector and about 25 percent for the entire urban economy after revision productivity advantages of larger cities are found to be much larger for the nonmanufacturing sector than for the manufacturing sector hence revitalization policies for large cities should be focused on nonmanufacturing sectors

agglomeration economies as manifested in technical efficiency at the firm level abstract this paper makes an attempt to assess the significance of agglomeration economies in the case of two indian industries electrical machinery and cotton and cotton textiles using firm level data an efficiency index based on a statistical stochastic frontier model is generated to examine its relationship with external scale variable s a positive association between technical efficiency and city size is evident although after a certain threshold level city size works more as diseconomies than economies of scale undue emphasis on industrial dispersal may therefore lead to suboptimal utilisation of resources

natural gas from shortages to abundance in the united states abstract the history of natural gas wellhead and pipeline regulation deregulation and regulatory reforms are discussed these reforms brought natural gas shortages and pipeline inefficiencies to an end they also created an economic platform that could support unanticipated developments in the supply and costs of domestic natural gas such unanticipated developments emerged in the last few years as several technological innovations came together to make it commercially attractive to development us shale gas deposits located deep in the earth how and why shale gas supplies will lead to dramatic changes in the united states energy future with appropriate environmental regulatory reforms are discussed

labor heterogeneity in an urban labor market abstract we construct a model of agglomeration economies in a labor market with friction and heterogeneity of both workers and firms with friction matches between workers and firms are random we show that with random matches an increase in the number of workers brings improvements in worker firm match quality and agglomeration economies emerge if and only if the technology of search exhibits increasing returns to scale we then discuss how to find out empirically whether this condition is satisfied furthermore we investigate properties of the agglomeration economies here and the relation between the city size and states of a labor market

urban agglomeration capital augmenting technology and labor market equilibrium abstract the objective of this paper is to measure urban productivity using japanese city based cross sectional data of 1980 the results of a labor demand ols regression analysis suggest two kinds of possible model specifications capital augmenting and demand supply equilibrium each model type is considered and the average effect of population density on labor productivity is shown to be 4 3 in the capital augmenting model and 8 0 in the equilibrium model

productivity growth in british manufacturing spatial variation in the role of scale economies technological growth and industrial structure this paper investigates the role of scale economies technological growth and industrial structure in creating spatial variation in manufacturing labour and total factor tfp productivity in britain separate estimates of a translog specification are presented for british manufacturing firms located in defined areas of the country over the period 1994 1998 the results show that tfp change due to scale economies and technological growth has been of much less important in influencing the output growth of manufacturing firms than input growth or industrial structure regarding the components of tfp technological growth has been the dominant force at play the analysis of average labour productivity identifies shifts to other factors of production and industrial structure as being the main determinants of change scale economies appear to have had a marginal role the results identify spatial patterns indicating that more favourable locational effects arise for firms in areas adjacent to large urban centre

a multi factor model with time varying and seasonal risk premiums for the natural gas market abstract in this paper we develop a quantitative model of the us natural gas market that explores its multi factor structure and its time varying and seasonal risk premiums with weekly spot and futures prices we show that three factors are preferred to describe the futures term structure and the time varying risk premiums are also significant moreover we found that the market implies a seasonal risk premium with two peaks and troughs in one year which is important to correctly price the futures by maturity month finally we link this seasonal risk premium to the uncertainty of the us natural gas demand and find a positive relationship between them these results reveal the complex aspect of the market and may have useful applications for other commodity sectors

the impact of the shale gas revolution on the u s and japanese natural gas markets we investigated whether the increase in the us shale gas production changed the structures of the us and japanese natural gas markets using market data for the period 2002 5 2012 5 our analysis consists of a structural break test and market integration analysis the bai and perron structural break test detected a break point of natural gas prices and consumption in 2005 as well as other external shocks hurricane katrina and the lehman shock that are irrelevant to shale gas development we eliminated the impact of these shocks by separating the data set using the breaks identified in our analysis we found the breaks skewed the estimation a market linkage existed between the us and japanese markets in the original data set while it did not in the separated data the vector autoregressive var model also indicated a significant change before and after the break point the us market had a one side influence on the japanese market before 2005 but the influence disappeared after 2005 our results implied that the shale gas revolution triggered by the increase in shale gas production in 2005 caused the change in the relationship between the us and japanese natural gas markets

urbanisation and regional productivity in korean manufacturing as the first study for korea we estimate the effects of urbanisation and localisation economies on the productivity of 19 korean manufacturing industries in 1983 1988 and 1993 based on the observation that material inputs contributed about 60 per cent of productivity growth in korea we consider gross output productivity which is an innovation that distinguishes our study from previous ones we find that localisation economies have been dominant features of korean manufacturing industries whereas korean manufacturing industries did not benefit much from locating in large cities more interestingly there are some indications of quadratic relations between city size and urbanisation economies

estimating the competitive storage model with trending commodity prices we present a method to estimate jointly the parameters of a standard commodity storage model and the parameters characterizing the trend in commodity prices this procedure allows the influence of a possible trend to be removed without restricting the model specification and allows model and trend selection based on statistical criteria the trend is modeled deterministically using linear or cubic spline functions of time the results show that storage models with trend are always preferred to models without trend they yield more plausible estimates of the structural parameters with storage costs and demand elasticities that are more consistent with the literature they imply occasional stockouts whereas without trend the estimated models predict no stockouts over the sample period for most commodities moreover accounting for a trend in the estimation imply price moments closer to those observed in commodity prices our results support the empirical relevance of the speculative storage model and show that storage model estimations should not neglect the possibility of long run price trends

economies of density and productivity in service industries an analysis of personal service industries based on establishment level data abstract this study aims to empirically investigate the determinants of service industry productivity such as economies of scale and economies of density by using establishment level data related to personal service industries in japan the study estimates the production functions for both value added and physical output measures in almost all the service industries examined significant economies of scale and economies of density are observed wherein productivity increases by 7 to 15 when the municipality population density doubles these findings are confirmed by an estimation in which the measures of physical output are considered instead of value added

globalization and the skilled city abstract the location of economic activity both across and within countries has undergone dramatic shifts over the last five decades three key trends stand out first cross country inequality has declined as many developing countries have grown rapidly second economic geography within countries has instead grown more unequal in both the developed and the developing world third within country spatial disparities have grown mainly because of the disproportionate success of skilled cities in this paper i develop a model that jointly explains these patterns as a consequence of deepening international economic integration my model explains the faster population and output growth of skilled cities as well as their tendency to increase their initial skill advantage consistent with the evidence my theory predicts a non monotonic path of urban growth in developed countries the model predicts a future shift in worldwide urban hierarchies as some developing world cities overtake unskilled cities in industrialized countries along global supply chains

agglomeration economies in the finnish manufacturing sector regional concentration of population and economic activity is a common phenomenon both in finland and the other most developed countries which refers to the existence of agglomeration economies two types of economies are usually recognized to be important specialization marshall externalities and diversity jacobs externalities economies the former refer to the geographical concentration of a specific industry and the latter to the industrial diversity of the local system this study examines the relationship between agglomeration economies and regional productivity in the manufacturing sector in finland a distinction is made between the effects of urbanization and localization economies the production function method is applied to the manufacturing sub sectors in the 83 nuts 4 level regions in 1995 and 1999 the results support the regional specialization more than diversification even if some differences can be seen between the manufacturing sub sectors

spatial interdependence in us outward fdi into africa latin america and the caribbean the existing literature on spatial interdependence in fdi flows has primarily focused on developed economies as hosts with these hosts economically tied together via good infrastructure and historically strong significant trade flows in contrast we explicitly test for the presence of spatial interdependence in developing hosts africa latin american and the caribbean where such ties are not as strong for us outbound fdi between 1995 and 2007 our empirical results confirm third country effects do matter even when controlling for spatial and time period fixed effects based on the signs of the market potential and spatial lag coefficients we find us fdi strategies into these regions as consistent with complex vertical specialisation

tracing the sources of local external economies in a cross sectional establishment level analysis using confidential secondary data the paper evaluates the influence of commonly postulated sources of localised external economies supplier access labour pools and knowledge spillovers on the productivity of two us manufacturing sectors farm and garden machinery and measuring and controlling devices measures incorporating different distance decay specifications provide evidence of the spatial extent of the various externality sources chinitz s 1961 hypothesis of the link between local industrial organisation and agglomeration economies is also investigated the results show evidence of labour pooling economies and university linked knowledge spillovers in the case of the higher technology measuring and controlling devices sector while access to input supplies and location near centres of applied innovation positively influences efficiency in the farm and garden machinery industry both sectors benefit from proximity to producer services although primarily at a regional rather than a highly localised scale

agglomeration economies in urban manufacturing industries a case of japanese cities abstract the effects of urban agglomeration economies on productivities in two digit manufacturing industries is estimated using the cross section data of japanese cities in 1979 urbanization and localization economies which are major forms of urban agglomeration economies are explicitly separated the estimates of these economies vary considerably among industries light industries receive more productive advantages from urbanization economies than from localization economies but heavy industries experience these economies more from localization economies than from urbanization economies

population growth and local public finance in japanese cities the determinants of japanese city population growth for the period 2000 to 2005 are empirically examined with particular attention to local public finance the selection of one fiscal indicator fi from four alternatives ordinary balance ratio obr ratio of outstanding borrowing rob to the ordinary account debt service payment ratio dspr and financial power index fpi and the consideration of spatial auto correlation provide 12 regression models in each regression six additional explanatory variables are considered with reference to earlier empirical studies empirical results suggest that 1 three fis excluding dspr are significant and 2 the number of local government officers and the ratio of graduates of not less than junior college are highly significant in all specifications

external economies as a mechanism of agglomeration in eu manufacturing productive externalities are significant determinants of agglomeration not deeply studied at the industry and international level we analyse the impact on productivity growth of technological externalities both inter and intraindustry national or international at the industry level for the eu countries and the period 1995 2002 the results confirm the advisability of considering international externalities when countries are taken as regions whose omission underestimates national spillovers together with national endowments and a central geographical position the growth of productivity is encouraged by national and international specialization as a general result moreover it is fuelled by stronger interindustry spillovers and productive diversification a result more evident for high technology industries while lower technology industries are more sensitive to the omission of international externalities economic integration seems to be relevant because supranational regions with less frictio

agglomeration economies localization or urbanization i estimate localization and urbanization economies with a methodology and data different from those of henderson and nakamura after demonstrating the problems associated with using a single agglomeration variable i present my estimates as nakamura found for japanese cities i find evidence of both localization economies and urbanization economies but i also find evidence of urbanization diseconomies in some industries as did henderson my evidence for localization and urbanization economies in american cities is stronger than henderson s evidence finally i show that the pattern of agglomeration economies by industry is consistent with observed patterns of industrial location

how does the u s natural gas market react to demand and supply shocks in the crude oil market abstract in this paper we use monthly data over the period from january 1976 to december 2012 and a structural var model to disentangle demand and supply shocks in the global crude oil market and investigate their effects on the real price of natural gas in the united states we identify the model by assuming that innovations to the real price of crude oil are predetermined with respect to the natural gas market and show that close to 45 of the variation in the real price of natural gas can be attributed to structural supply and demand shocks in the global crude oil market

agglomeration economies and productivity in indian industry abstract the primary objective of this paper is to examine the extent to which agglomeration economies contribute to economic productivity we distinguish three sources of agglomeration economies 1 at the firm level from improved access to market centers 2 at the industry level from intra industry localization economies and 3 at the regional level from inter industry urbanization economies there is considerable variation in the sources and magnitudes of agglomeration economies between industrial sectors in particular our results indicate that access to markets through improvements in inter regional infrastructure is an important determinant of firm level productivity whereas benefits of locating in dense urban areas do not appear to offset associated costs

urban diversity and economic growth at the risk of some simplification it is possible to identify four periods of intense study of cities by economists each of these has led to an increased understanding of the economics of urban areas and the unique role played by cities in the modem economy the first of these periods occurred in the decade after world war i only about ten years after the truck revolutionized the transport of goods within urban areas this period included the first systematic empirical analysis of the forces affecting the location of firms and households within cities robert murray haig 1926 and a number of other microeconomists at columbia analyzed the spatial pattems of manufacturing activity in lower manhattan and in the rest of new york city haig jmd his colleagues devoted considerable attention to where things belong in an urban area p 402 providing the first systematic economic analysis of urban spatial structure for example they analyzed the garment industry concluding that it was destined by nature to disperse north of 14th street and predicting that it would follow the estabhshed spatial pattem of the cooperage barrelmaking industry standardization in size and quality of barrels had meant that identical barrels could be made throughout the new york metropolitan area even in new jersey and the introduction of the truck meant that they could be transported cheaply throughout the region and exported the second of these periods though not in chronological order began in the mid 1960s it formalized many of the insights about location incentives within urban areas which had been uncovered a half century before mixed them with the logic of heinrich von thunen s 1826 ancient theories about agricultural crops and land values and applied them to the hotisehold sector the works of william alonso 1964

urban productivity in china in this empirical study we test the relationship of chinese urban productivity and city size using over 119 790 firm level production data cross 28 industries from the third national industrial survey along with the urban population data of 224 cities we find strong and prevailing significant agglomeration economies in chinese urban areas the estimated average agglomeration elasticity is around 0 051 implying that every doubling of city size will provide a 3 6 per cent gain in firm productivity the breakdown analysis suggests that based on current data the major source of the agglomeration advantage comes from localisation economies benefits from the concentration of firms of the same industry within one geographical area rather than urbanisation economies externalities from urban development itself the maximum size study also suggests that while most chinese cities have yet to grow to demonstrate the full strength of agglomeration economies many chinese industries have reached the optimal i

bidder returns in bancassurance mergers is there evidence of synergy abstract we provide evidence on the potential for bidder wealth gains in bancassurance mergers by examining a sample of such mergers in the united states and abroad these combinations are expected to produce positive wealth gains if there are synergies between these two types of financial firms we find positive bidder wealth effects that are significantly related to economies of scale as measured by the size of the target relative to the bidder potential economies of scope and the locations of the bidders and targets these results suggest that the bancassurance architectural structure for financial firms does offer some benefits and thus may become more prominent in future years