Technology intensity and agglomeration economies

Abstract

This article investigates the relationship between industry technology intensity and the impacts of agglomeration economies on industrial growth. Many recent studies suggest the actual economic impacts of different forms of agglomeration economies depend on industrial characteristics such as technology intensity, but systematic empirical evidence is still lacking. To fill this gap, we analyze employment data covering all 3-digit NAICS industries of U.S. counties. The results confirm that technology-intensive industries are more likely to benefit from Jacobs spillovers as measured by related variety, while sectors with low technology intensities can better benefit from MAR spillovers as measured by regional specialization.