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SERC/Urban and Spatial Programme Discussion Paper

Heterogeneous Agglomeration

Many prior treatments of agglomeration either explicitly or implicitly suppose that all industries agglomerate for the same reasons, with traditional Marshallian (1890) factors affecting all industries similarly. An important instance of this approach is the extrapolation of the agglomeration experience of one key sector or cluster to the larger economy. Another is the pooling of data to look at common tendencies in agglomeration. This paper uses UK establishment level data on coagglomeration to document heterogeneity across industries in the microfoundations of agglomeration economies. The pattern of heterogeneity that we document is consistent with both traditional Marshallian theories and with alternative approaches that emphasize the adaptive and organizational aspects of agglomeration.

Giulia Faggio, Olmo Silva and William C. Strange

8 January 2014     Paper Number SERCDP0152

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This SERC/Urban and Spatial Programme Discussion Paper is published under the centre's Urban programme.