Journal of Political Economy

This paper discusses the prevalence of Silicon Valley-style localizations of individual manufacturing industries in the United States. A model in which localized industry-specific spillovers, natural advantages, and random chance contribute to geographic concentration motivates new indices of geographic concentration and coagglomeration. The indices contain controls that facilitate cross-industry and cross-country comparisons. The authors find almost all industries to be more concentrated than a random dart-throwing model predicts but the degree of localization is often slight. They also discuss which industries are concentrated, the geographic scope of localization, coagglomeration patterns, and other topics.