Regional market potential and the number and size of firms: Observations and evidence from chile

Félix Modrego; Philip McCann; William E. Foster; M. Rose Olfert

doi:10.1080/17421772.2014.930165

Regional market potential and the number and size of firms: Observations and evidence from chile

Félix Modrego^*, Philip McCann, William E. Foster, M. Rose Olfert

^*Corresponding author for this work

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Abstract

This paper investigates the relationship between market potential and the spatial variation in the number and the average size of firms. We adapt the canonical model of the New Economic Geography to demonstrate this relationship and to derive an empirical specification suitable for estimation through dynamic panel techniques. The model is tested against municipal data on the number of firms per adult in Chilean comunas for 2005-2010. Our results confirm that market potential along with place-specific fixed costs play an important role in determining the spatial variation in the number of firms per capita.

Original language	English
Pages (from-to)	327-348
Number of pages	22
Journal	Spatial Economic Analysis
Volume	9
Issue number	3
DOIs	https://doi.org/10.1080/17421772.2014.930165
Publication status	Published - 29 Jul 2014

Keywords

Firm number
firm size
market potential
new economic geography
Chile

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10.1080/17421772.2014.930165

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title = "Regional market potential and the number and size of firms: Observations and evidence from chile",

abstract = "This paper investigates the relationship between market potential and the spatial variation in the number and the average size of firms. We adapt the canonical model of the New Economic Geography to demonstrate this relationship and to derive an empirical specification suitable for estimation through dynamic panel techniques. The model is tested against municipal data on the number of firms per adult in Chilean comunas for 2005-2010. Our results confirm that market potential along with place-specific fixed costs play an important role in determining the spatial variation in the number of firms per capita.",

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AU - Modrego, Félix

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AU - Foster, William E.

AU - Rose Olfert, M.

PY - 2014/7/29

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AB - This paper investigates the relationship between market potential and the spatial variation in the number and the average size of firms. We adapt the canonical model of the New Economic Geography to demonstrate this relationship and to derive an empirical specification suitable for estimation through dynamic panel techniques. The model is tested against municipal data on the number of firms per adult in Chilean comunas for 2005-2010. Our results confirm that market potential along with place-specific fixed costs play an important role in determining the spatial variation in the number of firms per capita.

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KW - firm size

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ER -

Regional market potential and the number and size of firms: Observations and evidence from chile

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Keywords

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