Comments on Laura Alfaro and Maggie Chen,

The Global Agglomeration of Multinational Firms

Michael J. FerrantinoU.S. International Trade Commission

prepared for the Washington Area International Trade Symposium,

March 11, 2011

These comments represent solely the views of the author. They do not represent the views of the U.S. International Trade Commission or any of its Commissioners.

These are powerful tools for understanding co-agglomeration of industries,

• But they’re computationally intensive:– “Repeating the procedure each time (as we examine,

respectively, MNC headquarters, subsidiaries, subsidiary employment, and domestic plants) requires approximately one month of computing time utilizing 2 quad core 3.00 GHz processors and Windows 64-bit systems.”

• We hope for computational advances in the future!– Or at least ways to mine the output generated in this process

My wish list• Add services

– Co-agglomeration might be high with finance, insurance, business services

• Try scales a lot smaller than 200 km– This is a nice scale for doing economic history and path

dependence– Policymakers trying to exploit agglomeration want to focus on

areas a lot smaller than 200 km• Can we differentiate between co-agglomeration in

different regions?– E.g. NW Europe, the Rio Grande, ASEAN

Interesting findings• Knowledge and capital complementarity seem to be the

strongest Marshallian forces• Many sectors co-agglomerate with publishing and

printing– Is this path dependence associated with Gutenberg?– Or is software in the relevant SICs?

• What are the intuition behind the industry pairs with high co-agglomeration?– I understand “Footwear” with “Boot and Shoe Stock and

Findings” but not most of the others– Understanding the forces would help in designing policies

Do “knowledge spillovers” vary in their intensity by the kind of industry or

knowledge relationship?• Typology of innovation networks in Powell and Grodal (2005)

– Primordial (common social identity, craft based)• Hollywood, and Italian shoe districts (Rabellotti and others) – smaller

than a province, especially at the specialization level– Strategic (purposive) – biotech/venture capital/pharma

• Case study?– Supply chain (horizontal specialization) –these could be huge

geographically (Factory Asia) but also localized • See Hiratsuka 2005 on the Baldwin example of a disk drive in

Thailand– Invisible college (research collaboration, fast access to news and novelty)

• WAITS participants came from a few kilometers radius