Coagglomeration Patterns in Portuguese Labour intensive Industries: Complementarity and Specialisation Dynamics
The aim of this paper is to analyse the patterns of industrial agglomeration in Portugal in order to understand their underlying dynamics. Industries tend to be concentrated geographically, rather than due to random causes, natural advantages or Marshallian forces. Empirically, industry pairwise coagglomeration is measured using the Ellison and Glaeser (1997) metric, with the goal of understanding the complementarity versus specialisation dynamics behind the industrial geographic concentration in Portugal. It is concluded that the most prominent industrial clusters in Portugal are as follows: textiles and clothing, footwear and transport, each one having a different agglomeration dynamic. While some sectors tend to benefit more from the interdependencies along the value chain (meaning vertical industrial relationships, related to complementary dynamics) others are more vulnerable to labour pooling (more to do with horizontal industrial relationships and specialisation dynamics) and others to both. For policymakers, for instance, it is of great use to know exactly the right triggers as the success of any programme results from the suitability of the initiatives being financially supported.