Agglomeration economies: an analysis of the determinants of employment in the cities of Ecuador
UNIVERSAL IDENTIFIER: http://hdl.handle.net/11093/2054
UNESCO SUBJECT: 53 Ciencias Económicas ; 5309 Organización Industrial y Políticas Gubernamentales ; 5311 Organización y Dirección de Empresas
DOCUMENT TYPE: article
The objective of this investigation is to study the role of agglomeration economies (manufacturing) in urban employment growth, as a proxy for economic growth, between 1980 and 2010 in Ecuador. The three measures of agglomeration-specialization, diversity, and density-are tested to determine their eﬀect on employment growth in industries. The empirical analysis is based on firm- and city-level data from manufacturing activities. A model is proposed to estimate the effect of agglomeration economies on the growth of employment and a regression is conducted using instrumental variables. In particular, the two-stage least squares (2SLS) estimator is used. We conclude that localization economies measured by a specialization index have a positive impact on the growth of employment in the period analyzed. The results are similar to those obtained by other work carried out both in developed and developing countries.
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