The productivity advantages of large cities: Distinguishing agglomeration from firm selection

Arbeitspapier

Firms are more productive on average in larger cities. Two main explanations have been offered: firm selection (larger cities toughen competition, allowing only the most productive to survive) and agglomeration economies (larger cities promote interactions that increase productivity), possibly reinforced by localised natural advantage. To distinguish between them, we nest a generalised version of a tractable firm selection model and a standard model of agglomeration. Stronger selection in larger cities left-truncates the productivity distribution whereas stronger agglomeration right-shifts and dilates the distribution. Using this prediction, French establishment level data, and a new quantile approach, we show that firm selection cannot explain spatial productivity differences. This result holds across sectors, city size thresholds, establishment samples, and area definitions.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: IZA Discussion Papers ; No. 6502

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Model Evaluation, Validation, and Selection ; Size and Spatial Distributions of Regional Economic Activity ; Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
• Thema: agglomeration ; firm selection ; productivity ; cities ; Produktivität ; Großstadt ; Agglomerationseffekt ; Unternehmenserfolg ; Marktaustritt ; Theorie

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Combes, Pierre-Philippe ; Duranton, Gilles ; Gobillon, Laurent ; Puga, Diego ; Roux, Sébastien
• Ereignis: Veröffentlichung
• (wer): Institute for the Study of Labor (IZA)
• (wo): Bonn
• (wann): 2012

Weitere Informationen

• Handle: http://hdl.handle.net/10419/58784
• URN: urn:nbn:de:101:1-2012080812474
• Letzte Aktualisierung: 10.03.2025, 11:42 MEZ