External economies as a mechanism of agglomeration in EU manufacturing

Abstract

Productive externalities are significant determinants of agglomeration, not deeply studied at the industry and international level. We analyse the impact on productivity growth of technological externalities, both inter-and intraindustry, national or international, at the industry level for the European Union (EU) countries and the period 1995-2002. The results confirm the advisability of considering international externalities when countries are takes as regions, whose omission underestimates national spillovers. Together with national endowments and a central geographical position, the growth of productivity is encouraged by national and international specialization as a general result; moreover, it is fuelled by stronger interindustry spillovers and productive diversification, a result more evident for high technology industries, while lower technology industries are more sensitive to the omission of international externalities. Economic integration seems to be relevant, because supranational regions with less friction for goods and factor movements are more likely to take advantage of external economies as a mechanism of productivity growth and agglomeration.

Does High-Tech Industry Agglomeration Promote Its Export Product Upgrading?—Based on the Perspective of Innovation and Openness

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Externalities of Urban Agglomerations: An Empirical Study of the Chinese Case

“…The existing research usually divides technological externality into the technology spillover within a department and the technology spillover across different departments, which correspond to specialization and diversification, respectively, in economic practice [34][35][36][37]. Ó Huallacháin and Lee [38] assessed technological specialization and diversity in urban inventions in the United States, and Wang et al [39] measured regional industrial specialization and diversity in China.…”

The effects of agglomeration economies on technical efficiency of manufacturing firms: evidence from Indonesia

“…Externality is a spreading effect of one activity that affects another activity, but, importantly, this condition is not directly reflected in the mechanism of market prices (Griliches 1992;Beaudry and Schiffauerova 2009). By their nature, externalities arise due to the interaction between economic agents, so that their effects should be most prominent when agents are in close physical proximity (Dekle 2002;Claver et al 2012). Static externalities refer to the benefit of firms from agglomeration within a single industry or within what are recognized as localization economies.…”