Agglomeration Overview:
Definitions: industry and urban agglomeration
Advantages of industry agglomeration
Sharing suppliers and supplier specialization
Tapping a common labor pool
Improving skills matching
Sharing knowledge
Urban agglomeration
Headquarters and functional specialization
Efficient vs. equilibrium size of agglomeration
Measuring agglomeration strengths: location quotients...
Agglomeration Advantages for
Firms
•Economies
of scale for a single firm –Generate
lower production
costs. •Concentration
of multiple
firms –Additional
cost savings –Firms
mutually support each other –not
just compete against one another
Agglomeration Advantages for
Firms
•Economies
of scale for a single firm –Generate
lower production
costs. •Concentration
of multiple
firms –Additional
cost savings –Firms
mutually support each other –not
just compete against one another
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