More generally, given that Australia sustains much larger agglomeration economies
and a much larger home-market effect than New Zealand, the economic geography arguments suggest that in the current era of globalisation, the only other ways that New Zealand can possibly narrow the labour productivity and wage gaps between the two countries are by (A) increasing New Zealand's domestic agglomeration effects, and also (B) by trying radically to reduce all other spatial transactions costs between the two countries.
He found cost of living to be a positive function of population density (the number of persons per square mile) because greater congestion will increase transit and marketing costs; a negative function of population as increased population will lead to agglomeration economies
which will decrease production costs and hence cost of living; a negative function of property tax/tax on capital as it will lead to bias towards labor intensive technology and hence the potential benefits of economies of scale will not be realised and also tax might be passed on from producers to consumers in the form of higher prices; a negative relationship with a dummy for legislation prohibiting trade union activity--will lead to lower costs of production and hence lower prices.
5) However, agglomeration economies
can equally exist for nonprofit firms.
While the main goals of these policies were to create agglomeration economies
and to increase productivity, more recent approaches--the most prominent being by far Porter's (1990, 1998, 2000a, 2000b) cluster strategy which revolves around the promotion and reinforcement of "a geographically proximate group of interconnected companies and associated institutions in a particular field, linked by commonalities and complementarities (2000a: 16)"--have emphasized the positive impact that a regional context made up of geographically proximate and industry-related firms and institutions can have on innovative activities (Bathelt, Malmberg, & Maskell, 2004; Cortright, 2006; Khan & Ghani, 2004; Rocha, 2004).
30) They conclude that external and agglomeration economies
are so relevant in the current Portuguese core industrial region that investors are willing to accept wages more than three times higher before becoming indifferent as between moving and staying.
Like Marshall, Weber (1929) combined the geographical location of industries with the concept of marketing factors as social benefits of regional agglomeration economies
Keywords: finance, insurance, real estate, Canadian FIRE firms, urban specialization, agglomeration economies
Knowledge Externalities, Agglomeration Economies
, and Employment Growth in Dutch Cities.
Prior to detailing the results of this study, a discussion on the concepts relating to agglomeration economies
, high-technology clusters and higher education liaisons is offered and, following that, a brief review of the 'high technology SME' literature is given.
The results obtained by Rosenthal and Strange provide fresh evidence on the importance of very local agglomeration economies
to sustained growth.
However, research on industrial clusters and agglomeration economies
in the UK suggests that the main gains do not stem from direct interchange between businesses, but rather from the shared infrastructure (such as universities, airports, and external road links), the quality of which reflects above all the size of population and the scale of economic activity within the region--i.
In this study, I address issues related to the fields of new trade theory, urban regional economic growth, agglomeration economies
and location theory.
Later, the conceptual chapter 'Geography and Innovation' describes the role of knowledge spillovers and the main concepts of agglomeration economies
Past studies have shown that location advantages and agglomeration economies
positively affect the location choice of foreign firms.
We also calculated similar estimates for each local authority area (using foreign-owned plant and machinery capital stock across all industries in each area and each year) to proxy for agglomeration economies
associated with the presence of foreign-owned plants.