Sectoral spillovers and the price of land: A cost analysis

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20 Scopus citations

Abstract

Under factor mobility, firms locate where local attributes enhance their productivity, but, in equilibrium, those gains are offset by higher local input prices. I study the variation in local input costs to identify production amenities across sectors in two ways. I estimate, first, hedonic rent and wage equations from individual households and workers and, second, local cost functions for different sectors across the US States and across Metropolitan Statistical Areas. I find evidence of externality gains from both a sector's and overall concentration of activity and from a better educated population. These gains are bigger in sectors with higher local land shares in the sample, finance and nondurable goods. (C) 2000 Elsevier Science B.V. All rights reserved.

Original languageEnglish (US)
Pages (from-to)565-585
Number of pages21
JournalRegional Science and Urban Economics
Volume30
Issue number5
DOIs
StatePublished - 2000
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics
  • Urban Studies

Keywords

  • Human capital
  • Input prices
  • Local externalities
  • Regional growth

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