Firm-worker matching in industrial clusters

• Type: Article in International Scientific Journal
• Date: 2014

Authors

Octávio Figueiredo (Author) FEP; Paulo Guimaraes (Author) FEP; Woodward, D (Author) Other

Journal

Title: Journal of Economic Geography

Vol. 14 No. 1

Pages: 1-19

ISSN: 1468-2702

Publisher: Oxford University Press

Indexing

ISI Web of Knowledge - 14 Citations

Scopus - 14 Citations

Other information

Authenticus ID: P-008-QK2

DOI: 10.1093/jeg/lbt009

Abstract (EN): In this article we use a novel approach and a large Portuguese employer-employee panel data set covering most of the economy to study Alfred Marshall's hypothesis that industrial agglomeration improves the quality of firm-worker matching. Our method employs recent developments in the estimation and analysis of models with high-dimensional fixed effects. Using wage regressions with controls for multiple sources of observed and unobserved heterogeneity, we find little evidence that the quality of matching increases with firm clustering within the same industry. This result supports Freedman (2008) analysis of the software industry in one U.S. state. Since our final regressions still uncover evidence for a large wage premium from industrial clustering, the results suggest that agglomeration advantages may stem from sources beyond labor matching. The wage premium also improves with urbanization economies, in line with previous work.

Language: English

Type (Professor's evaluation): Scientific

No. of pages: 19