Agglomeration and firm performance: One firm’s medicine is another firm’s poison
Environment and Planning A: international journal of urban and regional research , Volume 48 - Issue 1 p. 132- 153
In this paper, we aim to reduce the ambiguity surrounding the agglomeration–performance relationship. We do so by taking firm-level and agglomeration-level heterogeneity into account simultaneously and focusing on the interactions between these two levels of analysis in explaining the effect of agglomeration on firm performance. Our central argument is that while some firms will benefit from agglomeration, others will be harmed by it. To assess our claims, we estimate multilevel models on firms’ productivity with nonlinear interaction effects between the agglomeration-level (urbanization, specialization, and knowledge intensity) and firm-level variables (size, internal knowledge base, and face-to-face contacts) using data from a sample of Dutch firms. Our results show that the effects of different dimensions of agglomeration on firm performance are strongly and nonlinearly moderated by firm characteristics. Moreover, the moderation effect is not uniform across the different agglomeration dimensions.
|Agglomeration, clusters, firm performance, knowledge externalities, productivity|
|Environment and Planning A: international journal of urban and regional research|
|Organisation||Erasmus School of Economics|
Knoben, J, Arikan, A.T, van Oort, F.G, & Raspe, O. (2016). Agglomeration and firm performance: One firm’s medicine is another firm’s poison. Environment and Planning A: international journal of urban and regional research, 48(1), 132–153. doi:10.1177/0308518X15602898