The productivity advantages of large cities: distingushing agglomeration from firm selection
Article dans une revue: Firms are more productive, on average, in larger cities. Two main explanations have been offered: firm selection (larger cities toughen competition, allowing only the most productive to survive) and agglomeration economies (larger cities promote interactions that increase productivity), possibly reinforced by localized natural advantage. To distinguish between them, we nest a generalized version of a tractable firm selection model and a standard model of agglomeration. Stronger selection in larger cities left-truncates the productivity distribution, whereas stronger agglomeration right-shifts and dilates the distribution. Using this prediction, French establishment-level data, and a new quantile approach, we show that firm selection cannot explain spatial productivity differences. This result holds across sectors, city size thresholds, establishment samples, and area definitions.
Auteur(s)
Pierre-Philippe Combes, Gilles Duranton, Laurent Gobillon, Diego Puga, Sébastien Roux
Revue
- Econometrica
Date de publication
- 2012
Mots-clés
- Agglomeration
- Firm selection
- Productivité
- Cities
Pages
- 2543-2594
URL de la notice HAL
Version
- 1
Volume
- 80