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Paper Presented on 41st Annual and Conference Mid-Continent Regional Science Association (MCRSA), June 3-5, 2010 St. Louis, MO
There is a tendency of industries to co-locate together in order to reap the benefits of externalities. The basic objectives of this study to identify the factors affecting agglomeration of health care sector in US cities. Due to differences in the nature of industries factors affecting agglomeration are likely to be different for different industries. Therefore this study has considered investigating on single health care sector. Moreover, this study used the panel data model in order to capture both cross-section and temporal dimension of the agglomeration. This study found that factors like local competition, population, input availability, and state research expenditure on health care are significant for the agglomeration of health care sector. This study has also identified that fixed effect panel data model can be an appropriate model to estimate the factors affecting agglomeration in health care sector.
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