City-industry agglomeration and changes in the geographic concentration of industry

Abstract

This paper investigates the effects of industry agglomeration on growth in U.S. metropolitan areas, and then examines whether these agglomeration effects contribute to changes in the geographic concentration of industry. Study results suggest that a high localization of industry, measured using location quotients, leads to a decrease in city-industry growth as indicated by the net change in establishment counts. Alternatively, large initial cityindustry size is associated with an increase in the change in the number of establishments above or below what is explained by overall metropolitan area growth. Both of these agglomeration effects contribute to a greater dispersion of industry. © Southern Regional Science Association 2010.