NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Geographic Concentration in U.S. Manufacturing Industries: A Dartboard Approach

Glenn Ellison, Edward L. Glaeser

NBER Working Paper No. 4840
Issued in August 1994
NBER Program(s):   EFG

This paper discusses the prevalence of Silicon Valley-style localizations of individual manufacturing industries in the United States. Several models in which firms choose locations by throwing darts at a map are used to test whether the degree of localization is greater than would be expected to arise randomly and to motivate a new index of geographic concentration. The proposed index controls for differences in the size distribution of plants and for differences in the size of the geographic areas for which data is available. As a consequence, comparisons of the degree of geographic concentration across industries can be made with more confidence. We reaffirm previous observations in finding that almost all industries are localized, although the degree of localization appears to be slight in about half of the industries in our sample. We explore the nature of agglomerative forces in describing patterns of concentration, the geographic scope of localization, and the extent to which agglomerations involve plants in similar as opposed to identical industries.

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Document Object Identifier (DOI): 10.3386/w4840

Published: Journal of Political Economy, Vol. 105, no. 5 (1997): 889-927. citation courtesy of

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