Creator

• Holmes, Thomas J.

Series

• Staff report (Federal Reserve Bank of Minneapolis. Research Department)

Issue number

• 190

Date Created

• 1995-04

Abstract

• This paper considers Marshall's argument that geographic concentration of industry facilitates specialization. I use Census data on manufacturing plants to examine the relationship between localization of industry and vertical disintegration. I find that establishments located near other establishments within the same industry tend to make more intensive use of purchased inputs than establishments without own-industry neighbors. This relationship only holds among industries that are geographically concentrated; having neighbors makes no difference in geographically dispersed industries. I argue that this pattern is consistent with a model in which increased opportunity for specialization is the reason some industries localize.

Related information

• Published in: Review of Economics and Statistics (Vol. 81, No. 2, May 1999, pp. 314-325) https://doi.org/10.1162/003465399558102.

Corporate Author

• Federal Reserve Bank of Minneapolis. Research Department

Publisher

• Federal Reserve Bank of Minneapolis

Resource type

• Research Paper

DOI

•  https://doi.org/10.21034/sr.190

License

• Creative Commons BY-NC Attribution-NonCommercial 4.0 International

Relationships

In Collection:

• Staff Reports

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