The economics of industrial location: Agglomeration, co-agglomeration, and inventory management

This paper provides an empirical framework used to identify the various causes of industrial agglomeration, co-agglomeration, and inventory turnover. Evidence emerges to suggest inter-industry linkages and transaction costs play a major role in the development of industrial co-agglomerations while high distribution costs are found to mitigate agglomeration when markets are evenly distributed across space. There also exists strong evidence industrial agglomeration, through its impact on local competition, provides incentive for firms to increase average inventory holdings.