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Ryohei Nakamura and Catherine J. Morrison Paul

In this chapter we focus on the measurement of economic agglomeration in the context of the clustering of regional economic activity. We first discuss various agglomeration measures that have been proposed in the literature, to provide alternative methodologies for the direct measurement of agglomeration. We then briefly review the estimation of the determinants or sources of agglomeration, and the resulting agglomeration economies or productivity effects of agglomeration, both of which involve methods of indirect measurement. Also, causality of productivity and firm location are discussed. In conclusion we highlight some topics that it will be important to address in future studies of agglomeration economies.

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Ryohei Nakamura and Catherine J. Morrison Paul

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Jeffrey P. Cohen and Catherine J. Morrison Paul

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Jeffrey P. Cohen and Catherine J. Morrison Paul

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Jeffrey P. Cohen, Cletus C. Coughlin and Catherine J. Morrison Paul

Clustering of firms and workers have long been important factors in urban and regional growth. In recent years, it has become even more apparent – anecdotally and empirically – that this clustering is an integral factor in the vibrancy of large cities (especially in the US). The lack of such agglomeration in smaller to medium-sized cities has precluded them from catching up to their super-city counterparts. The literature on agglomeration economies has demonstrated that the channel for clustering to affect growth occurs through the production function and/or the cost function of individual firms. In addition to summarizing the growing literature on agglomeration economies, this chapter outlines the empirical production theory frameworks that many researchers have utilized to estimate agglomeration economies, and how agglomeration economies are intimately tied to the determination of urban and regional growth.