Seminars & Events
APL (Ajiken Power Lunch)
Identifying Neighborhood Effects among Firms: Evidence from Location Lotteries of the Tokyo Fish Market
APL
(Ajiken
Power
Lunch)
is
a
lunchtime
workshop
open
to
public,
including
IDE
staffs,
visiting
research
fellows,
IDEAS
students,
outside
researchers
and
graduate
students.
This
workshop
provides
a
platform
for
presentation
of
any
work
in
progress
where
we
can
discuss
in
either
English
or
Japanese.
Those
who
would
attend
a
seminar
are
asked
to
announce
yourself
to
receptionists
on
your
arrival
at
the
IDE
and
to
obtain
APL
Organizers'
signature
on
your
admission
card
after
the
seminar.
Date&time:
June 23, 2017. (Friday) 13:00-14:30
Venue:
Theme:
Identifying Neighborhood Effects among Firms: Evidence from Location Lotteries of the Tokyo Fish Market
Abstract
Firms may benefit from clustering of neighboring firms of certain characteristics because such clustering allows buyers to save search cost. This idea is central to the theory of formation of market places and to many branches of agglomeration theory. A fundamental challenge in investigating such mechanisms arises from economic agents’ self-selection into locations. This makes it difficult to distinguish whether certain neighboring firms allow firms to perform better or whether such firms just cluster together. We overcome this challenge by analyzing neighborhood effects among intermediate wholesalers located in the Tokyo Tsukiji Fish Market and by exploiting a unique feature of their shop locations within the market: their locations are determined every 4-10 years by relocation lotteries. First, we confirm that their shop locations are indeed randomly distributed. Then, we find that the characteristics of the neighboring firms significantly affect firm performance. Specifically, the diversity of the types of neighboring firms as well as the fraction of neighboring firms selling similar products positively affect the performance of small-size and specialized firms. We find no effect of characteristics of close neighbors not facing the same corridor, and thus not sharing flow of buyers, which provides evidence that our results are not due to factors other than buyers, such as technology spillovers. Our results provide the first randomization-based evidence of the key theoretical mechanism of the formation of market places: agglomeration saves the search cost of the buyers.
Speaker:
Kensuke
Teshima
(Assistant
Professor,
Centro
de
Investigación
Económica,
Instituto
Tecnológico
Autónomo
de
México
(ITAM))
Chair:
Tomohiro Machikita
Languages:
English
Institute
of
Developing
Economies,
APL
Organizers
E-mail: APL