NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Firm Fragmentation and Urban Patterns

Esteban Rossi-Hansberg, Pierre-Daniel Sarte, Raymond Owens III

NBER Working Paper No. 11839
Issued in December 2005
NBER Program(s):   EFG

We document several empirical regularities regarding the evolution of urban structure in the largest U.S. metropolitan areas over the period 1980-1990. These regularities relate to changes in resident population, employment, occupations, as well as the number and size of establishments in different sections of the metropolitan area. We then propose a theory of urban structure that emphasizes the location and internal structure decisions of firms. In particular, firms can decide to locate their headquarters and operation plants in different regions of the city. Given that cities experienced positive population growth throughout the 1980s, we show that firm fragmentation produces the diverse set of facts documented in the paper.

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Document Object Identifier (DOI): 10.3386/w11839

Published: Esteban Rossi-Hansberg & Pierre-Daniel Sarte & Raymond Owens iii, 2009. "Firm Fragmentation And Urban Patterns," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 50(1), pages 143-186, 02.

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