measure of geographic concentration in Spain's wood-based industry

The reasons why industries could want to concentrate geographically may stem from different sources such as the existence of natural advantages in a certain location, as well as from labor, transportation, and technological benefits. It is therefore of interest to find out the degree of this concentration in industrial sectors, and to investigate the possible causes determining it. The objective of this paper was to study the geographic concentration of Spain's wood-based industry. Based on indices developed by Ellison and Glaeser (1997), we first measured to what extent the pattern of geographic concentration observed is due to firm internal factors-economies of scale-or, in turn, due to the influence of external economies within a wood-based industry (agglomeration). Spillovers among firms between different wood-based industries (coagglomeration) were also studied. Results indicate moderate to high degrees of agglomeration in most wood-based sectors, supporting the existence of location spillovers and natural advantages. The wood-based industry as a whole presents a low level of coagglomeration indicating a small inter-dependence between the manufacturers of wood, paper and furniture. On the other hand, wood manufacturing industries present a high level of coaggtomeration, showing strong spillovers among them. Coagglomeration was also found in the pulp and paper industry but at a lower level than in the wood manufacturing industry. [PUBLICATION ABSTRACT]