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Self-Reinforcing Agglomerations? An Empirical Industry Study

Karen Helene Midelfart Knarvik and Frode Steen
The Scandinavian Journal of Economics
Vol. 101, No. 4, Industrial Policy in Open Economies (Dec., 1999), pp. 515-532
Published by: Wiley on behalf of The Scandinavian Journal of Economics
Stable URL: http://www.jstor.org/stable/3440652
Page Count: 18
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Self-Reinforcing Agglomerations? An Empirical Industry Study
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Abstract

We test for the existence of endogenous agglomeration forces, using structural econometric models. After showing generally how to establish the existence of agglomeration forces empirically, we undertake an industry study of the maritime industry in Norway. The results suggest that there are significant economies of scale in the maritime industry. These economies of scale are mainly found in sub-groups of a set of nine maritime industries. This indicates that the maritime industry consists of two self-reinforcing agglomerations, but that there are few mechanisms actually keeping the two together.

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