e-journal
Testing geographic and economic distance of agglomeration economies
Purpose – The purpose of this paper is to test geographic and economic distance of industrial
agglomeration.
Design/methodology/approach – Based on a recent census database in China, we estimate the
production function of Chinese firms, focusing on the impact of agglomeration economies.
Findings – The estimation results provide strong evidence that agglomeration effects decline with
increasing geographic and economic distance.
Originality/value – Previous studies examine agglomeration effects at certain geographic and
industrial level, but largely ignore that agglomeration benefit may be different at different levels
of geography and industry. This paper contributes to the literature by examining the geographic and
economic distance of agglomeration economies, and shows a clear pattern on geographic and
industrial scope of agglomeration economies.
Keywords Agglomeration, National economy, Economic sectors, China, Industrialized economies
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