Agglomeration: an Earlier Contribution Revisited

Following on from the work of Goldstein and Gronberg, it is argued that under certain conditions, internal economies of scope form the bases for two types of agglomeration economy. These differ from two more familiar types, which are based on internal and external economies of scale. A further two types of agglomeration economy are shown to derive from different forms of external economy. The conditions under which agglomeration economies based on internal economies may co-exist with those based on external economies are then examined. This leads to a discussion of a scheme by which the various types of agglomeration economy may be drawn together within a common framework.