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GEOGRAPHIC CONCENTRATION AND ESTABLISHMENT SCALE: AN EXTENSION USING PANEL DATA *
Author(s) -
Barrios Salvador,
Bertinelli Luisito,
Strobl Eric
Publication year - 2006
Publication title -
journal of regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.171
H-Index - 79
eISSN - 1467-9787
pISSN - 0022-4146
DOI - 10.1111/j.1467-9787.2006.00475.x
Subject(s) - panel data , extension (predicate logic) , scale (ratio) , irish , econometrics , set (abstract data type) , data set , economic geography , fixed effects model , geography , regional science , economics , statistics , mathematics , computer science , cartography , linguistics , philosophy , programming language
In a recent study, Holmes and Stevens (2002) identify for the first time the positive relationship that exists between establishment scale and local industry concentration using a large cross‐sectional plant‐level data set for the United States. Using an exhaustive plant‐level panel data set for Irish manufacturing covering nearly three decades, we are able to extend their analysis in two ways. First, we show that failing to control for fixed effects biases the relationship upward, although the essence of the result still remains after fixed effects are included. Second, the link is substantially weaker when plants locate for the first time in an area, but strengthens with age for those that survive in the long run. We link our results to recent contributions on the dynamics of geographic concentration.