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The Economics of ClustersLessons from the French Experience$
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Gilles Duranton, Philippe Martin, Thierry Mayer, and Florian Mayneris

Print publication date: 2010

Print ISBN-13: 9780199592203

Published to Oxford Scholarship Online: January 2011

DOI: 10.1093/acprof:oso/9780199592203.001.0001

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Measuring Economic Gains from Clusters

Measuring Economic Gains from Clusters

Chapter:
(p.87) 4 Measuring Economic Gains from Clusters
Source:
The Economics of Clusters
Author(s):

Gilles Duranton

Philippe Martin

Thierry Mayer

Florian Mayneris

Publisher:
Oxford University Press
DOI:10.1093/acprof:oso/9780199592203.003.0004

This chapter analyses empirically the effect of spatial agglomeration of activities on the productivity of firms using French individual firm data from 1996 to 2004. This allows us to control for endogeneity biases that the estimation of agglomeration economies typically encounters. In the short run, French firms benefit from localization economies, but not from urbanization economies nor from competition effects. The benefits generated by increased sectoral clustering, though positive and highly significant, are modest and geographically very limited. The gains from clusters are also quite well internalized by firms in their location choice: we find very little difference between the geography that would maximize productivity gains and the geography actually observed.

Keywords:   clusters, localization economies, spatial concentration, productivity

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