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The dynamics of local employment in France



Type:   Article
Titre:   The dynamics of local employment in France
Auteur(s):   Combes, Pierre-Philippe - Groupement de Recherche en Economie Quantitative (Auteur)
Magnac, Thierry - Groupe de recherche en économie mathématique et quantitative (Auteur)
Robin, Jean-Marc (1961-...) - UCL Department of Economics (Auteur)
In:   Journal of Urban Economics
Date de publication:   2004
Éditeur:   PAYS-BAS  :  Elsevier
Volume:   56
Numéro:   2
Pages:   217-243  p.
ISSN:   00941190
Résumé:   [en] We study the impact of local economic structure on employment dynamics. Local employment is decomposed into the product of the average plant size and the number of plants in the area and industry. We estimate the dynamics of both components simultaneously using French yearly data on 36 industries and 341 areas between 1984 and 1993. The careful specification of short-run dynamics and the control for fixed effects and endogeneity are shown to be critical in the empirical model. First, static externalities are prevalent compared to dynamic ones. Moreover, whereas area-and-industry effects explain most of the spatial variation of plant size, the local number of plants is mainly driven by the current local economic structure. Policies targeted towards plant creation should thus be more efficient. For instance, large areas endowed with a small number of even size industries have both more and larger plants. A large number of plants heterogeneous in size also increases the average plant size, but the number of plants is higher when plants have similar size.

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