Edward Glaeser, William Kerr, 26 November 2008

Many academics, policy makers, and business leaders stress the importance of local conditions for explaining spatial differences in entrepreneurship and economic development. This column assesses the importance of various forces for agglomeration. The empirical evidence suggests that market effects, such as proximity to input suppliers and labour market pooling, play a big role, while there is less support for factors like entrepreneurial culture and industrial diversity.

Philippe Martin, Thierry Mayer, Florian Mayneris, 04 July 2008

Governments spend heavily on industrial clusters. They are wasting their money if firms naturally cluster to reap agglomeration gains. This column presents evidence from France that questions policymakers’ enthusiasm for promoting clusters.


CEPR Policy Research