In this paper we use a novel approach and a large Portuguese employer-employee panel data set to study the hypothesis that industrial agglomeration improves the quality of the firm-worker matching process. Our method makes use of recent developments in the estimation and analysis of models with...

This paper investigates the hypothesis that knowledge spillovers increase where industries are localized. At the same time, we take a fresh look at the role of distance in knowledge diffusion. Our unique database combines U.S. county-level patent citation data with county-level establishment and...

This paper reexamines the relationship between geographic concentration of an industry (localization) and establishment scale. We use an approach that builds on Ellison & Glaeser’s (1997) dartboard location model to measure localization. Contrary to Holmes & Stevens’s (2002) pioneering...

A common problem with spatial economic concentration measures (e.g. Gini, Herfindhal, entropy and Ellison-Glaeser indices) is accounting for the position of regions in space. While they purport to measure spatial clustering, these statistics are confined to calculations within individual areal...

In this paper we reinterpret the location quotient, the commonly employed measure of regional industrial agglomeration, as an estimator derived from Ellison and Glaeser’s (1997) dartboard framework. This approach provides a theoretical foundation on which to build statistical tests for the...

This paper uses a novel measure and detailed plant-level Portuguese data to reexamine the Marshallian hypothesis that specialization and the vertical disintegration of firms should be greater in areas where an industry concentrates. Our measure of firm specialization and vertical disintegration...

The recent index proposed by Ellison & Glaeser (1997) is now well established as the preferred method for measuring the localization of economic activity. We build on McFadden's Random Utility (Profit) Maximization framework, to develop a parametric version of this measure that is more...