As we will see below, the nature and scale of spatial transactions costs have changed radically, and the evidence regarding the contemporary role of
agglomeration economies in driving productivity growth is now so overwhelming that it is more or less beyond question (Venables, 2006).
Also, as noted by Pasha and Pasha (1999) there is likely to be a very ambiguous relationship between city size and cost of living, with land values and congestion costs increasing as city size increases, exerting an upward influence on cost of living whereas
agglomeration economies tend to keep costs of living relatively low.
Within nonprofit industries,
agglomeration economies, if they exist, could be smaller.
Although her theoretical framework is broader and encompasses factors such as access to capital, zoning regulations, and the importance of
agglomeration economies for entrepreneurial start-ups, so-called "Jacobs externalities" are now broadly understood to mean "interindustrial knowledge spillovers" occurring in economically diverse cities as a result of the interaction of individuals possessing different backgrounds (Algaze, 2005; Desrochers & Hospers, 2007).
Moreover, if external and
agglomeration economies were dictating independent decisions to expand along the Atlantic coast and to relocate there, the petitions for government authorisation were reflections of this desire to benefit from clustering, and the authorisations granted simply confirm the trend.
Simply, economic activity clusters in space (as is evident within cities and regionally both intra- and inter-nationally) and this suggests that
agglomeration economies persist in this era of the Internet, teleconferencing and the like.
Agglomeration Economies, High-Technology Clusters and Firm-Higher Education Institution Liaisons
Robert Inman's commentary argues that the very local nature of the
agglomeration economies identified by the Rosenthal-Strange analysis suggests that economic development policies can be locally designed and, more significantly, locally funded.
Positive external effects are one important factor included in the phenomenon called
agglomeration economies.
The literature related to
agglomeration economies in Chapter 3 is well explained.
More recently, scholars of strategic management have extended the ideas underlying theories of economic geography that explain firm activities and have applied them to examine intra-country differences in the relative abundance of resources and the importance of
agglomeration economies in explaining the location patterns of foreign firms (Porter 1998, Enright 1998, Nachum 2000).
2] is associated with the proportion of the capital stock operated by foreign-owned plants in local authority area r, (14) and covers all manufacturing industries to try to capture any spatial
agglomeration economies.
