Localization and Industry Clustering Econometrics: An Assessment of Gibbs Models for Spatial Point Processes

The objective of this paper is to assess an approach to statistical modeling of point referenced establishment data that permit inclusion of “environmental” or establishment‐specific covariates and specific forms of interestablishment interaction. Gibbs models are used to decompose the conditional intensity of the spatial point process into trend and interaction components. The trend is composed of access measures (primarily different classes of roads) and three different interaction processes are tested: Geyer, area interaction, and Strauss hard core. While the models used have proved to be useful in ecology, we are unaware of any applications to establishment or firm data. In empirical application, the models yield intuitively appealing results for the trend component, and the ability to specify the interaction component gives deeper insights into interestablishment spatial dynamics than any previously published methods.