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.
Get full access to this article
View all access options for this article.
References
1.
Acs, Z.J., Audretsch, D.B. and Feldman, M.P. (1992) Real effects of academic research: comment, American Economic Review, 82, pp. 363-367.
2.
Adams, J.D. and Jaffe, A.B. (1996) Bounding the effects of R&D: an investigation using matched establishment- firm data, RandJournal of Economics , 27, pp. 700-721.
3.
Anselin, L., Varga, A. and Acs, Z. (1997) Local geographic spillovers between university research and high technology innovations, Journal of Urban Economics, 42, pp. 422-448.
4.
Beyers, W.B. (1992) Producer services and metropolitan growth and development , in: E. S. Mills and J. F. MacDonald (Eds) Sources of Metropolitan Growth, pp. 125-146, New Jersey: Rutgers University Press.
5.
Burt, D.N. (1989) Managing suppliers up to speed, Harvard Business Review, 67, pp. 127-135.
6.
Carlino, G.A. (1978) Economies of Scale in Manufacturing Location. Boston, MA: Martinus NijhoffSocial Science Division.
7.
Chinitz, B. (1961) Contrasts in agglomeration: New York and Pittsburgh , American Economic Review, 51, pp. 279-289.
8.
Cooke, P. and Morgan, K. (1998) The Associational Economy. Oxford: Oxford University Press.
9.
Cooke, P., Boekholt, P. and Tödtling, F. (2000) The Governance of Innovation in Europe. London: Pinter.
10.
Doms, M.E. (1991) Essays on capital equipment and energy technology in the manufacturing sector. Unpublished PhD thesis, University of Wisconsin at Madison.
11.
Enright, M.J. (1995) Organization and coordination in geographically concentrated industries, in: N. R. Lamoreaux and D. M. G. Raff (Eds) Coordination and Information: Historical Perspectives on the Organization of Enterprise, pp. 103-142. Chicago, IL: University of Chicago Press.
12.
Evans, A.W. (1972) The pure theory of city size in an industrial economy, UrbanStudies, 9, pp. 49-78.
13.
Feser, E.J. (1998) Enterprise, external economies, and economic development , Journal of Planning Literature, 12, pp. 283-302.
14.
Feser, E.J. (2001a) A flexible test for agglomeration economies in two US Manufacturing industries, Regional Science and Urban Economics, 31, pp. 1-19.
15.
Feser, E.J. (2001b) Agglomeration, enterprise size, and productivity , in: B. JoHansson, C. Karlsson and R. R. Stough (Eds) Theories of Endogenous Regional Growth, pp. 231-251. Berlin : Springer.
16.
Glaeser, E.L., Kallal, H.D., Scheinkman, J.A. and Shleifer, A. (1992) Growth in cities, Journal of Political Economy, 100, pp. 1126-1152.
17.
Goe, W.R. (1991) The growth of producer services industries: sorting through the externalization debate, Growth and Change, 22, pp. 118-141.
18.
Griliches, Z. (1990) Patent statistics as economic indicators: a survey , Journal of Economic Literature, 28, pp. 1661-1707.
19.
Helper, S. (1991) Strategy and irreversibility in supplier relations: the case of the U.S. automobile industry, Business History Review, 65, pp.781-824.
20.
Henderson, J.V. (1986) Efficiency of resource usage and city size, Journal of Urban Economics, 19, pp. 47-70.
21.
Hoover, E.M. (1937) Location Theory and the Shoe and Leather Industries . Cambridge, MA: Harvard University Press.
22.
Imrie, R. and Morris, J. (1992) A review of recent changes in buyer-supplier relations , Omega, 20, pp. 641-652.
23.
Isard, W. (1956) Location and the Space Economy. New York: John Wiley.
24.
Jaffe, A.B. (1989) Real effects of Academic research, American Economic Review, 79, pp. 957-970.
25.
Jaffe, A.B., Trajtenberg, M. and Henderson, R. (1993) Geographic localization of knowledge spillovers as evidenced by patent citations, Quarterly Journal of Economics , 108, pp. 577-598.
26.
Kim, H.Y. (1992) The translog production function and variable returns to scale, Review of Economics and Statistics, 74, pp. 546-551.
27.
Klier, T.H. (1994) The Impact of lean manufacturing on sourcing relationships , Economic Perspectives, July/August, pp. 8-18.
28.
Krugman, P. (1991) Geography and Trade. Cambridge, MA: MIT Press.
29.
Lucas, R.E., JR (1988) on the Mechanics of Economic Development, Journal of Monetary Economics, 22, pp. 3-42.
30.
Marshall, A. (1890/1961) Principles of Economics: An Introductory Volume, 9th edn. London: Macmillan.
31.
Moomaw, R.L. (1983) Spatial productivity variations in manufacturing: a critical survey of cross-sectional analysis, International Regional Science Review, 8, pp. 1-22.
32.
Moomaw, R.L. (1988) Agglomeration economies: localization or urbanization? , Urban Studies, 25, pp. 150-161.
33.
Moomaw, R.L. (1998) Agglomeration economies: are they exaggerated by industrial aggregation ?, Regional Science and Urban Economics , 28, pp. 199-211.
34.
Nakamura, R. (1985) Agglomeration economies in urban manufacturing industries, a case of Japanese cities, Journal of Urban Economics , 17, pp. 108-124.
35.
Newman, R.G. (1989) Single sourcing: short-term savings versus long-term problems, Journal of Purchasing and Materials Management, 25, pp. 20-25.
36.
Norton, R.D. (2000) The geography of the new economy, in: S. LovEridge (Ed.) Web Book in Regional Science (www.rri.wvu.edu/webbook/norton).
37.
Porter, M. (2000) Location, competition, and economic development: local clusters in a global economy, Economic Development Quarterly , 14, pp. 15-34.
38.
Richardson, H.W. (1974) Agglomeration potential: a generalization of the income potential concept, Journal of Regional Science, 14, pp.325-336.
39.
Robinson, E.A.G. (1931) The Structure of Competitive Industry. Cambridge, MA: Cambridge University Press .
40.
Roelandt, T. and den Hertog, P. (1999) Boosting Innovation: The Cluster Approach. Paris: Organisation for Economic Co-operation and Development .
41.
Romer, P.M. (1986) Increasing returns and long-run growth, Journal of Political Economy, 94, pp.1002-1037.
42.
Sasaki, K. (1985) Regional difference in total factor productivity and spatial features, Regional Science and Urban Economics , 15, pp.489-516.
43.
Saxenian, A. (1994) Regional Advantage: Culture and Competition in Silicon Valley and Route128. Cambridge, MA: Harvard University Press .
44.
Scott, A.J. (1986) Industrial organization and location: division of labor, the firm, and spatial process, Economic Geography , 63, pp. 215-231.
45.
Stigler, G.J. (1951) The division of labour is limited by the extent of the market, Journal of Political Economy, 59, pp. 185-193.
46.
Weber, A. (1929) Theory of the Location of Industries, trans. by C. J. Friedrich. Chicago, IL: University of Chicago Press.
47.
Zucker, L.G., Darby, M.R. and Armstrong, J. (1998) Geographically localized knowledge: spillovers or markets?, Economic Inquiry, 36, pp. 65-86.
