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 th...

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Bibliographic Details
Published inJournal of urban economics Vol. 53; no. 1; pp. 1 - 28
Main Author Henderson, J.Vernon
Format Journal Article
LanguageEnglish
Published Elsevier Inc 2003
Elsevier
SeriesJournal of Urban Economics
Subjects
Agglomeration
Dynamic externalities
Economics
High technology
Industrial productivity
Machinery industry
Plant production
Plant size
Productivity
Scale economies
Spillovers
Urban economics
O300
Productivity
Scale economies
S620
R000
L600
Dynamic externalities
Agglomeration
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Summary: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.
Bibliography:ObjectType-Article-2
SourceType-Scholarly Journals-1
ObjectType-Feature-1
content type line 23
ISSN:0094-1190
1095-9068
DOI:10.1016/S0094-1190(02)00505-3