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Journal of Economic Geography Advance Access originally published online on September 1, 2005
Journal of Economic Geography 2005 5(5):605-620; doi:10.1093/jeg/lbi008
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© The Author (2005) Published by Oxford University Press. All rights reserved. For Permissions, please email: journals.permissions@oxfordjournals.org

How important is geography for agglomeration?

Michael W. M. Roos*

* Department of Economics, University of Dortmund, Vogelpothsweg 87, Dortmund, D-44221, Germany. email <M.Roos{at}wiso.uni-dortmund.de>

In this paper, I examine the influence of natural geographic features on the location of production in Germany. In particular, I quantify how much of the geographic pattern of GDP can be attributed to natural features such as resource endowments and location (‘geography’). At most, ~36% of GDP's spatial variation can be explained by direct and indirect effects of geography. After controlling for agglomeration economies and the interaction effect of geography and agglomeration economies, the net influence of geography is only about 7%.

Keywords: economic geography, first nature, second nature, agglomeration,
JEL classification: R12, O52
Date submitted: 14 December 2004     Date accepted: 13 July 2005


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