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SERC/Urban and Spatial Programme Discussion Paper
Investigating Agglomeration Economies in a Panel of European Cities and Regions
Michael Artis, Declan Curran and Marianne Sensier April 2011
Paper No' SERCDP0078:
Full Paper (pdf)

JEL Classification: C22; E32; E37; E40

Tags: agglomeration; system dynamic panel data estimations

This paper investigates agglomeration economies in an annual panel of NUTS 2 and NUTS 3 city regions across France, Germany, Ireland, Italy, Spain and the UK over 1980-2006 and comparing three sub-samples to see if the effects have changed over time. We uncover evidence of long run agglomeration effects of around 6% for NUTS 2 and NUTS 3 city regions for the full sample. The underlying pattern that this data reflects is changing sectoral composition in which manufacturing was declining, to be largely replaced by services; then more recently a period of city-based economic growth with the financial and business services-led boom at its heart.