The Productivity Advantages of Large Cities: Distinguishing Agglomeration from Firm Selection

Pierre-Philippe Combes, Gilles Duranton, Laurent Gobillon, Diego Puga and Sébastien Roux ()

No 2009-08, Working Papers from Center for Research in Economics and Statistics

Abstract: Firms are more productive on average in larger cities. Two explanations have been offered:agglomeration economies (larger cities promote interactions that increase productivity) and firmselection (larger cities toughen competition allowing only the most productive to survive). Todistinguish between them, we nest a generalised version of a seminal firm selection model and astandard model of agglomeration. Stronger selection in larger cities left-truncates the productivitydistribution whereas stronger agglomeration right-shifts and dilates the distribution. We assess therelative importance of agglomeration and firm selection using French establishment-level dataand a new quantile approach. Spatial productivity differences in France are mostly explained byagglomeration.

Pages: 46
Date: 2009
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Citations: View citations in EconPapers (105)

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Related works:
Journal Article: The Productivity Advantages of Large Cities: Distinguishing Agglomeration From Firm Selection (2012)
Working Paper: The productivity advantages of large cities: distingushing agglomeration from firm selection (2012)
Working Paper: The productivity advantages of large cities: distingushing agglomeration from firm selection (2012)
Working Paper: The Productivity Advantages of Large Cities: Distinguishing Agglomeration from Firm Selection (2012)
Working Paper: The productivity advantages of large cities: Distinguishing agglomeration from firm selection (2010)
Working Paper: The Productivity Advantages of Large Cities: Distinguishing Agglomeration from Firm Selection (2009)
Working Paper: The productivity advantages of large cities: Distinguishing agglomeration from firm selection (2009)
Working Paper: The productivity advantages of large cities: Distinguishing agglomeration from firm selection (2009)
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