INDIVISIBILITIES, SYNERGY AND PROXIMITY: THE NEED FOR AN INTEGRATED APPROACH TO AGGLOMERATION ECONOMIES

The aim of the paper is to present a review of the literature on agglomeration economies in a light such that it is possible to uncover the building blocks for use in a multidimentional approach to agglomeration economies. The paper claims that the different conceptual dimensions - industrial, socio-cultural/cognitive and geographic - build upon the three micro-foundations of agglomeration economies - indivisibility, synergy and proximity - and explain their nature, scope and intensity. The paper stresses two main issues. The first is that a socio-cultural/cognitive perspective still today ignored by mainstream approaches to agglomeration economies is an additional important conceptual dimension on which to understand the complex mechanisms whereby exchanges of knowledge, labour or intermediate goods take place in agglomerated areas. The second is that a multidimensional approach comprising the three different dimensions in the study of agglomeration economies makes it possible to overcome a deterministic approach to agglomeration economies and move instead towards a stochastic interpretation which opens the black box of this complex phenomenon.