Industrial location at the intra-metropolitan level: The role of agglomeration economies

The objective of this paper is to analyse the influence of agglomeration economies on location decisions taken by new firms inside metropolitan areas. As we assume that these economies differ according to firms' level of technology, our sample comprises new firms from high, intermediate and low technology industries. We are particularly interested in analysing the effects of agglomeration economies that are felt over very short distances (inside the metropolitan areas. We introduce in our estimation the effect of the central city as a determinant for the location of new firms in the rest of the metropolitan area.