FIRM FRAGMENTATION AND URBAN PATTERNS* |
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| Authors: | Esteban Rossi‐Hansberg Pierre‐Daniel Sarte Raymond Owens iii |
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| Affiliation: | 1. Princeton University, U.S.A.;2. Federal Reserve Bank of Richmond, U.S.A.;3. We thank Gerald Carlino, Satyajit Chatterjee, Glenn Ellison, Andrew Haughwout, Shih‐Kun Peng, Kei‐Mu Yi, and seminar participants at Columbia University, the NARSC 2005 Meetings, the NBER Urban Economics Conference, the Federal Reserve System Committee Meetings in Regional Economics, the Federal Reserve Banks of Philadelphia and New York, as well as two anonymous referees for helpful comments and suggestions. We also thank Matthew Harris, Jon Petersen, and Kevin Bryan for excellent research assistance. The views expressed in this article are solely those of the authors and do not necessarily represent those of the Federal Reserve Bank of Richmond or the Federal Reserve System. Please address correspondence to: Esteban Rossi‐Hansberg, Deparment of Economics and Woodrow Wilson School, 309 Fisher Hall, Princeton, NJ 08544‐1021, U.S.A. E‐mail: . |
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| Abstract: | We document several empirical regularities regarding the evolution of urban structure in the largest U.S. metropolitan areas over the period 1980–90. These regularities relate to changes in resident population, employment, occupations, as well as the number and size of establishments in different sections of the metropolitan area. We then propose a theory of urban structure that emphasizes the location and internal structure decisions of firms. In particular, firms can decide to locate their headquarters and operation plants in different regions of the city. Given that cities experienced positive population growth throughout the 1980s, we show that firm fragmentation produces the diverse set of facts documented in the article. |
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