Agglomeration externalities are the key factor explaining the existence of cities and their size. However, while the various micro foundations of agglomeration externalities stress the importance of total factor productivity (TFP), the empirical evidence on agglomeration externalities rests on measures obtained using firm revenue or value-added as a measure of firm output: revenue-based TFP (TFP-R). This article uses data on French manufacturing firms’ revenue, quantity, and prices to estimate TFP and TFP-R and decompose the latter into various elements. Our analysis suggests that the revenue productivity advantage of denser areas is mainly driven by higher prices charged rather than differences in TFP. At the same time, firms in denser areas are able to sell higher quantities and generate higher revenues, despite higher prices. These and other results we document suggest that firms in denser areas are able to charge higher prices because they sell higher demand/quality products. In this respect, two key elements related to this capacity to sell more at higher prices are the degree of vertical differentiation and trade cost, with products characterized by higher vertical differentiation and/or lower trade costs featuring stronger patterns and driving overall results.

中文翻译：

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论城市的生产力优势


集聚外部性是解释城市存在及其规模的关键因素。然而，虽然集聚外部性的各种微观基础强调全要素生产率（TFP）的重要性，但集聚外部性的经验证据依赖于使用企业收入或增加值作为企业产出衡量标准所获得的衡量标准：基于收入的TFP（ TFP-R）。本文利用法国制造业企业的收入、数量和价格数据来估算TFP和TFP-R，并将后者分解为各种要素。我们的分析表明，人口稠密地区的收入生产率优势主要是由更高的价格驱动的，而不是全要素生产率的差异。与此同时，尽管价格较高，但人口密集地区的企业仍能够销售更多数量并产生更高收入。我们记录的这些结果和其他结果表明，人口密集地区的公司能够收取更高的价格，因为它们销售需求更高/质量更高的产品。在这方面，与以更高价格销售更多产品的能力相关的两个关键因素是垂直差异化程度和贸易成本，具有较高垂直差异化和/或较低贸易成本的产品具有更强的模式并推动整体业绩。