There is wide variation in the sizes of manufacturing plants, even within the most narrowly defined industry classifications used by statistical agencies. Standard theories attribute all such size differences to productivity differences. This paper develops an alternative theory in which...

Does national market size matter for industrial structure? Round One (Krugman) answered in the affirmative: Home market effects matter. Round Two (Davis) refuted this, arguing that an assumption of convenience - transport costs only for the differentiated goods - conveniently obtained the...

Big cities specialize in services rather than manufacturing. Big-city establishments in services are larger than the national average while those in manufacturing are smaller. This paper proposes an explanation of these and other facts. The theory is developed in an economic geography model that...

In this chapter we discuss the data sources and methods available for studying the spatial distribution of economic activity in North America. We document facts about the specialization of states and regions, as well as locations differentiated by their degree of urbanization. We also report...