11.522: UIS Research Seminar (Fall 2007) - Discussion notes

Tuesday, November 13, 2007, 5:00 - 7:00 PM

Industry Spatial Clustering within Metropolises:
 Measurement, Detection, Inference and Determinants:
Case Studies in Boston and Dallas

Discussion Leader: Xiongjiu Liao

Abstract
Recently, we are seeing an increasing number of studies about industry clustering published in the fields of economics, business, planning and geography. While these studies include both theoretical and empirical efforts, most of them only give attention to industry clustering at the regional or national levels and those at local levels are largely neglected.  Without studies at the local level, we have limited capability to answer some critical questions about industry clustering such as:  at which locations do firms within an industry choose to cluster? Which firms within an industry tend to cluster? Which determinants explain firm locations within or outside clusters; to what degree? Are these determinants the same as those that explain an industry’s choice to locate within the region? What strategies can be used to attract firm clusters in specific locations? … This paper fills this gap and explores these questions by empirically studying industry clustering within metropolitan areas. With the use of firm establishment data in Boston and Dallas, we measure the degree of clustering in manufacturing sector, locate significant manufacturing firm clusters at 1% significance level, test those confounding determinants for industry clustering in terms of: knowledge spillover, labor pooling and inter-medium product market, and compare our findings with recent studies. This paper also contributes in its application of many spatial statistical methods in hypothesis testing and analysis of the growing number spatially detailed datasets about firm locations.

Discussion questions:

• What indices have you found in literatures that researchers use to measure industry clustering? Which ones you prefer and why?
• Do you think industry clustering studies should be taken at which spatial levels and why?
• Which industries will show significant clustering at local level? And which firms?
• At which locations will firms choose to cluster? Near any firms? Near manufacturing firms? What are the locational characteristics of these clusters in your opinion?
• Do you think it is possible to affect industry clustering by policy efforts? If so, which policies can you suggest? Do you expect your suggestion to work for any chosen region?

Portion of the reference: (  All the references can be found in the E-journals listings that are accessible via the MIT Libraries: http://www.jstor.org/cgi-bin/jstor/listjournal.

• Ellison, G., Glaeser, E.L. (1997) Geographic concentration in US manufacturing industries: a dartboard approach. Journal of Political Economy, 105(5):889-927.
• Marcon, Puech, J. (2003) Evaluating the geographic concentration of industries using distance-based methods. Economic Geography, 3: 409-428
• Michael Wasylenko, Timothy J Bartik, Harley T Duncan, Therese J McGuire, Robert M Ady. New England Economic Review. Boston: Mar/Apr 1997. p. 37 (16 pages)
• Michael Porter’s Competition and Economic Development web site: http://www.isc.hbs.edu/
• Paul Krugmanz Geographical Economics and Its Implications for Regional Development Theory: A Critical Assessment; Ron Martin; Peter Sunley; Economic Geography, Vol. 72, No. 3. (Jul., 1996), pp. 259-292.
• Peddle, Michael T.;The Appropriate Estimation of Intrametropolitan Firm Location Models: An Empirical Note; Land Economics, 1987, vol. 63, issue 3, p 303, ISSN 00237639.
• Stuart S. Rosenthal; William C. Strange; The Determinants of Agglomeration, Journal of Urban Economics, Volume 50, Issue 2, September 2001, Pages 191-229
• Wheeler , Christopher H., Industry Localization and Earnings Inequality: Evidence from U.S. Manufacturing (September 27, 2004). FRB of St. Louis Research Division Working Paper No. 2004-023. Available at SSRN: http://ssrn.com/abstract=646964

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