Spatial Productivity Variations in Manufacturing: A Critical Survey of Cross-Sectional Analyses

Abstract

This paper examines recent work on productivity variations over space. Labor productivity and labor productivity controlled for capital intensity both vary among regions and across city size. Urbanization and localization economies, as well as those factors that influence national productivity growth, can be expected to influence these differentials. Empirical studies, however, have not gone much beyond the use of total population or employment in a region as a measure of urbanization or localization economies. As the survey shows, much research remains to be done. Two examples of the needed research are (1) a more detailed specification of the determinants of productivity differentials, and (2) the use of more sophisticated empirical techniques.