Published: June 2009 | Category: Sustainable land transport , Research programme , Research & reports | Audience: General
This paper analyses the relationship between the multi-factor productivity of New Zealand businesses and the effective employment density of the areas where they operate.
Quantifying these agglomeration elasticities is of central importance in the evaluation of the wider economic benefits of transport investments.
We estimate that firms in an area with 10% higher effective density will have productivity that is 0.69% higher, once we control for industry-specific production functions and the sorting of more productive firms across industries and locations.
We present separate estimates of agglomeration elasticities for specific industries and regions, and examine the interaction of agglomeration with capital, labour and other inputs.
Keywords: agglomeration, productivity
