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This investigation analyses the causes of industrial localisation over the twentieth century in US counties by making emphasis on the service economy. Using census employment data by sector in four benchmark years, this paper examines the role of resource endowments and market size on county location coefficients. The model of localisation is approached in three steps: first, it is shown that relative endowments have an impact in the geographical allocation of production as traditional literature defends.The second step assesses the way that technology changed the relationship of factor inputs over the century, making the role of capital and skilled labor crucial. The last step shows that adding market potential into the regression makes everything else insignificant. Using a detailed enough geographical scale of analysis, these results suggest that increasing returns are behind the localisation of knoweldge intensive services, but also any other non-agricultural production. However, the appropriate conditions for increasing returns to occur seem to be constrained by physical geography.

About Alexandra Lopez Cermeño

Alexandra is a PhD candidate in Economic History at Universidad Carlos III de Madrid, where she received her undergraduate degree in economics before she undertook her MSc in International and European Development in University of Glasgow. She also has experience in several private sector multinational companies. Her research interests include urban and regional economics, economic history and spatial econometrics.

Alexandra Lopez Cermeño

Universidad Carlos III



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