We examine two sources of productivity improvement in the specialized industrial clusters of the early twentieth century Japanese silk-reeling industry. Agglomeration improves the productivity of each plant through positive externalities, shifting plant-level productivity distribution to the...

We examine two sources of productivity improvement in the specialized industrial clusters. Agglomeration improves the roductivity of each plant through positive externalities, shifting plant-level productivity distribution to the right. Selection expels less productive plants through...