Employment Centers and Agglomeration Economies: Foundations of a Spatial Economic Development Strategy

Chengri Ding, Yi Niu, and Gerrit-Jan Knaap

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Previous research provides evidence that jobs and firms in U.S. metropolitan areas are concentrated in economic centers, creating a polycentric urban form. Previous research also suggests that firms realize localization economies when they locate near other firms in the same industry and urbanization economies when they locate near firms in other industries. In this article, we tie these concepts together in an exploration of the spatial distribution of employment in the Baltimore-Washington metropolitan area. Our analysis suggests that the spatial distribution of employment in Maryland is characterized by the existence of concentrated employment centers that create a polycentric urban form. What is more, we find these centers provide both urbanization and localization economies as well as unspecified locational advantages.