Externalities and Industrial Development

  title={Externalities and Industrial Development},
  author={J. Vernon Henderson},
  journal={NBER Working Paper Series},
  • J. Henderson
  • Published 1 May 1994
  • Economics
  • NBER Working Paper Series
Using a panel data set of county-level employment in machinery, electrical machinery, primary metals, transportation, and instruments, this paper analyzes the role of dynamic externalities for individual industries. Key issues examined include the role of externalities from own industry concentration (localization, or MAR externalities) versus the role of externalities from overall diversity of the local environment (urbanization, or Jacobs externalities). In contrast to previous studies, use… 
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