This paper estimates agglomeration-effects for France, Germany, Italy, Spain, and the UK. It considers the endogeneity of the spatial distribution of employment and spatial fixed-effects. The results suggest that agglomeration-effects in these European countries are only slightly smaller than in the US, with an estimated elasticity of average-labor-productivity with respect to employment-density of 4.5 percent compared to 5 percent in the US. The paper examines two main explanations for spatial differences in average-labor-productivity: spatial externalities and increasing-returns at the firm-level combined with non-tradabilities or transportation-costs. These explanations have been studied in detail for the US, but not much empirical work has been done for European countries. However, spatial differences in average-labor-productivity within European countries are large, and many European countries collect data at a fine level of geographic detail, allowing for a more flexible empirical approach to agglomeration-effects. The paper combines spatial data on value-added for Germany, Italy, France, Spain, and the UK with data on employment and education to estimate agglomeration-effects. The sample consists of 628 Nuts 3-regions, which correspond to different administrative divisions in each country. The estimation is based on two simple models of spatial agglomeration, leading to the same reduced-form relationship between employment-density and productivity at the local geographic level. The main challenge in estimating agglomeration-effects is distinguishing between two competing explanations for the positive correlation between agglomeration and productivity. The paper proposes two approaches to address this problem: including variables that may explain spatial differences in total-factor-productivity and using an instrument for regional employment-density. The empirical results show substantial agglomeration-effects in the five European countries, with agglomeration-effects not appearing to differ significantly between countries. Least-squares estimates suggest that a doubling of employment-density increases average-labor-productivity by approximately 5 percent. Using total land-area as an instrument for employment-density yields a somewhat lower estimate of 4.5 percent. These estimates remain unchanged when spatial externalities across neighboring Nuts 3-regions are taken into account, but fall to 3.4 percent when the share of value-added generated in the agricultural-sector is included. The paper concludes that agglomeration-effects in these European countries are only slightly lower than in the US and do not vary significantly across countries. Further research is needed to understand the effect of agglomeration on industry-structure and the consequences of European economic integration for aggregate productivity.This paper estimates agglomeration-effects for France, Germany, Italy, Spain, and the UK. It considers the endogeneity of the spatial distribution of employment and spatial fixed-effects. The results suggest that agglomeration-effects in these European countries are only slightly smaller than in the US, with an estimated elasticity of average-labor-productivity with respect to employment-density of 4.5 percent compared to 5 percent in the US. The paper examines two main explanations for spatial differences in average-labor-productivity: spatial externalities and increasing-returns at the firm-level combined with non-tradabilities or transportation-costs. These explanations have been studied in detail for the US, but not much empirical work has been done for European countries. However, spatial differences in average-labor-productivity within European countries are large, and many European countries collect data at a fine level of geographic detail, allowing for a more flexible empirical approach to agglomeration-effects. The paper combines spatial data on value-added for Germany, Italy, France, Spain, and the UK with data on employment and education to estimate agglomeration-effects. The sample consists of 628 Nuts 3-regions, which correspond to different administrative divisions in each country. The estimation is based on two simple models of spatial agglomeration, leading to the same reduced-form relationship between employment-density and productivity at the local geographic level. The main challenge in estimating agglomeration-effects is distinguishing between two competing explanations for the positive correlation between agglomeration and productivity. The paper proposes two approaches to address this problem: including variables that may explain spatial differences in total-factor-productivity and using an instrument for regional employment-density. The empirical results show substantial agglomeration-effects in the five European countries, with agglomeration-effects not appearing to differ significantly between countries. Least-squares estimates suggest that a doubling of employment-density increases average-labor-productivity by approximately 5 percent. Using total land-area as an instrument for employment-density yields a somewhat lower estimate of 4.5 percent. These estimates remain unchanged when spatial externalities across neighboring Nuts 3-regions are taken into account, but fall to 3.4 percent when the share of value-added generated in the agricultural-sector is included. The paper concludes that agglomeration-effects in these European countries are only slightly lower than in the US and do not vary significantly across countries. Further research is needed to understand the effect of agglomeration on industry-structure and the consequences of European economic integration for aggregate productivity.