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Do neighboring municipalities matter in industrial location decisions? Empirical evidence from Spain

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Alañón Pardo, Ángel and Walsh, Patrick J. and Myro Sánchez, Rafael (2018) Do neighboring municipalities matter in industrial location decisions? Empirical evidence from Spain. Empirical Economics, 55 (3). pp. 1145-1179. ISSN 0377-7332

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Official URL: https://doi.org/10.1007/s00181-017-1307-5



Abstract

This paper focuses on industrial location, assuming that entrepreneurs not only consider the advantages associated with a certain municipality, but also those coming from nearby areas. Exploratory analysis reflects the existence of spatial patterns in the creation of manufacturing establishments and sheds light on the geographical scope on which agglomeration economies operate in industrial location. Spatial Probit models and standard Probit models with spatially lagged explanatory variables are estimated to test whether neighboring municipalities’ location decisions and characteristics, including agglomeration economies, matter in industrial location choices.
Results show that neighboring municipalities location decisions and characteristics help to explain location decisions of new establishments for 11 manufacturing industries in Spanish municipalities (NUTS V) over the period 1991–1995.


Item Type:Article
Uncontrolled Keywords:Spatial location models ; Geographical scope agglomeration economies ; Industrial location ; Spain
Subjects:Social sciences > Economics > Regional economics
Social sciences > Economics > Business enterprises
Social sciences > Economics > Industrial organization
JEL:L6, R3
ID Code:54863
Deposited On:02 Apr 2019 13:03
Last Modified:02 Apr 2019 13:03

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