In section 3 and 4, we explain the aggregate production functions for urban areas in order to estimate the
agglomeration economies. In section 5, we summarize the results, followed by a summary of major conclusions and implications in section 6.
In this context it is relevant to understand the evolution and the dynamics that lie behind both results, in a country where
agglomeration economies seem to have had a marginal impact and where natural resource endowments have been crucial to explain the spatial location of the economic activity (the nitrate mining cycle was extremely concentrated in space whereas the copper mining has been much more disperse).
Aiming to contribute to the field of international business from the perspective of the determinants of the export performance, this study is guided by the following research question: What is the influence of the
agglomeration economies of a regional cluster on firm's export performance?
Under-populated prime cities in transition countries fail to capitalize on the
agglomeration economies to a full extent.
Crozet, Mayer and Muchielli (2004), Head, Ries and Swenson (1995, 1999), and Hilber and Voicu (2010), the analysis takes great care in identifying the effects of
agglomeration economies on FDI location.
"The Wealth of Cities:
Agglomeration Economies and Spatial Equilibrium in the United States," by Edward Glaeser and Joshua Gottlieb, 2009.
For example, Weber (1929) and Marshall (1920) argue that one of the major factors that would help clustering of firms in the host country is the existence of
agglomeration economies. Likewise, Mallampally and Sauvant (1999) mention that FDI may flow into a country not for its own market nor to capture the locational advantage of the country per se, but rather to use it as a springboard into other countries in the region.
Agglomeration economies are progressively offset by crowding-out effects.
Related to the theoretical developments, if for two decades NEG focused on the macro-heterogeneity of locations, showing how this can be generated endogenously by the decisions taken at micro-economic level by individuals and identical companies, the specialists (Octtaviano, 2011) show that the future research should analyze more deeply the micro-heterogeneity of individuals and companies, throwing a light upon how interactions between the two levels of heterogeneity affect the existence and intensity of the
agglomeration economies.
Auto production in the industry's early days was not exclusive to Detroit, but it became more and more concentrated there because
agglomeration economies gave Detroit firms a competitive advantage: low-cost links to suppliers of raw materials and components, access to a larger and deeper pool of labor (including managers and engineers) with specialized skills, and--perhaps most important--the technological spillovers resulting from proximity to talented minds grappling with similar problems.