IDEAS home Printed from https://ideas.repec.org/a/bla/jemstr/v12y2003i3p327-362.html
   My bibliography  Save this article

Knowledge Spillovers and Growth in the Disagglomeration of the Us Advertising‐Agency Industry

Author

Listed:
  • Charles King
  • Alvin J. Silk
  • Niels Ketelhöhn

Abstract

We investigate knowledge spillovers and externalities in the disagglomeration and growth of the advertising‐agency industry. A simple model of high demand, low wages, and externalities associated with clusters of related industries can explain the dispersion of advertising agency employment across states. Other factors affected the industry growth rate within states. Consistent with Jacobs and Porter but contrary to Marshall, Arrow, and Romer, competition, but not specialization, enhanced growth. In accord with Porter (1990), growth increased with buyer cluster size. Diversity had no effect on growth. Despite improvements in telecommunications and transportation reducing effective distances, location still matters.

Suggested Citation

  • Charles King & Alvin J. Silk & Niels Ketelhöhn, 2003. "Knowledge Spillovers and Growth in the Disagglomeration of the Us Advertising‐Agency Industry," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 12(3), pages 327-362, September.
    • Handle: RePEc:bla:jemstr:v:12:y:2003:i:3:p:327-362
    DOI: 10.1111/j.1430-9134.2003.00327.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1430-9134.2003.00327.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1430-9134.2003.00327.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Alvin J. Silk & Ernst R. Berndt, 1994. "Costs, Institutional Mobility Barriers, and Market Structure: Advertising Agencies as Multiproduct Firms," NBER Working Papers 4826, National Bureau of Economic Research, Inc.
    2. Feldman, Maryann P. & Audretsch, David B., 1999. "Innovation in cities:: Science-based diversity, specialization and localized competition," European Economic Review, Elsevier, vol. 43(2), pages 409-429, February.
    3. Guy Dumais & Glenn Ellison & Edward L. Glaeser, 2002. "Geographic Concentration As A Dynamic Process," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 193-204, May.
    4. Edward L. Glaeser & Glenn Ellison, 1999. "The Geographic Concentration of Industry: Does Natural Advantage Explain Agglomeration?," American Economic Review, American Economic Association, vol. 89(2), pages 311-316, May.
    5. Adam B. Jaffe & Manuel Trajtenberg & Rebecca Henderson, 1993. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 108(3), pages 577-598.
    6. K. J. Arrow, 1971. "The Economic Implications of Learning by Doing," Palgrave Macmillan Books, in: F. H. Hahn (ed.), Readings in the Theory of Growth, chapter 11, pages 131-149, Palgrave Macmillan.
    7. Silk, Alvin J & Berndt, Ernst R, 1994. "Costs, Institutional Mobility Barriers, and Market Structure: Advertising Agencies as Multiproduct Firms," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 3(3), pages 437-480, Fall.
    8. Baptista, Rui & Swann, Peter, 1998. "Do firms in clusters innovate more?," Research Policy, Elsevier, vol. 27(5), pages 525-540, September.
    9. Kim, Sukkoo, 1998. "Economic Integration and Convergence: U.S. Regions, 1840–1987," The Journal of Economic History, Cambridge University Press, vol. 58(3), pages 659-683, September.
    10. Alvin J. Silk & Ernst R. Berndt, 1994. "Costs, Institutional Mobility Barriers, and Market Structure: Advertising Agencies as Multiproduct Firms," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 3(3), pages 437-480, September.
    11. Gordon H. Hanson, 2000. "Scale Economies and the Geographic Concentration of Industry," NBER Working Papers 8013, National Bureau of Economic Research, Inc.
    12. Alvin Silk & Lisa Klein & Ernst Berndt, 2002. "Intermedia Substitutability and Market Demand by National Advertisers," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 20(4), pages 323-348, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Robert Faff & Tribeni Lodh & Jerry Pawada, 2012. "Location Decisions of Domestic and Foreign-Affiliated Financial Advisors: Australian Evidence," Journal of Financial Services Research, Springer;Western Finance Association, vol. 42(3), pages 207-228, December.
    2. Mikaela Backman, 2014. "Human capital in firms and regions: Impact on firm productivity," Papers in Regional Science, Wiley Blackwell, vol. 93(3), pages 557-575, August.
    3. Mohammad Arzaghi & Ernst R. Berndt & James C. Davis & Alvin J. Silk, 2008. "Economic Factors Underlying the Unbundling of Advertising Agency Services," NBER Working Papers 14345, National Bureau of Economic Research, Inc.
    4. Belal Fallah & Mark D. Partridge & Dan S. Rickman, 2014. "Geography and High-Tech Employment Growth in US Counties," Journal of Economic Geography, Oxford University Press, vol. 14(4), pages 683-720.
    5. Henri L.F. de Groot & Jacques Poot & Martijn J. Smit, 2007. "Agglomeration, Innovation and Regional Development: Theoretical Perspectives and Meta-Analysis," Tinbergen Institute Discussion Papers 07-079/3, Tinbergen Institute.
    6. Argentino Pessoa, 2014. "Agglomeration and regional growth policy: externalities versus comparative advantages," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 53(1), pages 1-27, August.
    7. Mohammad Arzaghi, 2005. "Quality Sorting and Networking: Evidence from the Advertising Agency Industry," Working Papers 05-16, Center for Economic Studies, U.S. Census Bureau.
    8. Alvin J. Silk & Charles King III, 2008. "Concentration Levels in the U.S. Advertising and Marketing Services Industry: Myth vs. Reality," Harvard Business School Working Papers 09-044, Harvard Business School.
    9. Martijn J. Smit & Maria A. Abreu & Henri L.F. Groot, 2015. "Micro-evidence on the determinants of innovation in the Netherlands: The relative importance of absorptive capacity and agglomeration externalities," Papers in Regional Science, Wiley Blackwell, vol. 94(2), pages 249-272, June.
    10. Guangchao Charles Feng & Yuting Zhang & Qiuyu Hu & Hong Cheng, 2018. "Performance of China’s advertising agencies: a time series cross-sectional analysis," Asia Pacific Business Review, Taylor & Francis Journals, vol. 24(5), pages 656-674, October.
    11. Marian Gorynia & Barbara Jankowska, 2007. "Wpływ klasterów na konkurencyjność i internacjonalizację przedsiębiorstw," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 7-8, pages 1-18.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. No, Angela, 2008. "Cities and Growth: Knowledge Spillovers in the Adoption of Advanced Manufacturing Technologies," The Canadian Economy in Transition 2008018e, Statistics Canada, Economic Analysis Division.
    2. Dirk Czarnitzki & Hanna Hottenrott, 2009. "Are Local Milieus The Key To Innovation Performance?," Journal of Regional Science, Wiley Blackwell, vol. 49(1), pages 81-112, February.
    3. Delgado, Mercedes & Porter, Michael E. & Stern, Scott, 2014. "Clusters, convergence, and economic performance," Research Policy, Elsevier, vol. 43(10), pages 1785-1799.
    4. Edward L. Glaeser & William R. Kerr, 2009. "Local Industrial Conditions and Entrepreneurship: How Much of the Spatial Distribution Can We Explain?," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 18(3), pages 623-663, September.
    5. Henry Overman & Stephen Redding & Anthony J. Venables, 2001. "The Economic Geography of Trade, Production, and Income: A Survey of Empirics," CEP Discussion Papers dp0508, Centre for Economic Performance, LSE.
    6. Beaudry, Catherine & Schiffauerova, Andrea, 2009. "Who's right, Marshall or Jacobs? The localization versus urbanization debate," Research Policy, Elsevier, vol. 38(2), pages 318-337, March.
    7. Yuandi Wang & Lutao Ning & Jian Li & Martha Prevezer, 2016. "Foreign Direct Investment Spillovers and the Geography of Innovation in Chinese Regions: The Role of Regional Industrial Specialization and Diversity," Regional Studies, Taylor & Francis Journals, vol. 50(5), pages 805-822, May.
    8. Mohammad Arzaghi & J. Vernon Henderson, 2008. "Networking off Madison Avenue," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 75(4), pages 1011-1038.
    9. Schwartz, Michael & Hornych, Christoph, 2009. "Industry Concentration and Regional Innovative Performance – Empirical Evidence for Eastern Germany," IWH Discussion Papers 8/2009, Halle Institute for Economic Research (IWH).
    10. Thomas Doring & Jan Schnellenbach, 2006. "What do we know about geographical knowledge spillovers and regional growth?: A survey of the literature," Regional Studies, Taylor & Francis Journals, vol. 40(3), pages 375-395.
    11. Michael Fritsch & Viktor Slavtchev, 2010. "How does industry specialization affect the efficiency of regional innovation systems?," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 45(1), pages 87-108, August.
    12. Illy, Annette & Hornych, Christoph & Schwartz, Michael & Rosenfeld, Martin T. W., 2009. "Urban Growth in Germany – The Impact of Localization and Urbanization Economies," IWH Discussion Papers 19/2009, Halle Institute for Economic Research (IWH).
    13. van Oort, Frank & Gerking, Shelby & van Soest, Daan, 2000. "A Spatial Analysis Of Endogenous Growth In Industry And Services In The Netherlands," ERSA conference papers ersa00p195, European Regional Science Association.
    14. van Soest, D.P. & Gerking, S.D. & van Oort, F.G., 2002. "Knowledge Externalities, Agglomeration Economies, and Employment Growth in Dutch Cities," Other publications TiSEM d3b82b0f-1b50-4845-98ce-8, Tilburg University, School of Economics and Management.
    15. Barrios, Salvador & Bertinelli, Luisito & Eric, Strobl & Antonio Carlos, Teixeira, 2003. "Agglomeration Economies and the Location of Industries: A comparison of Three small European Countries," MPRA Paper 5704, University Library of Munich, Germany.
    16. Argentino Pessoa, 2012. "Regional cluster policy: key features and critical issues," ERSA conference papers ersa12p250, European Regional Science Association.
    17. Stefan Kipar, 2012. "Determinants of Firm Innovation - Evidence from German Panel Data," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 45.
    18. Francesco Quatraro & Stefano Usai, 2017. "Are knowledge flows all alike? Evidence from European regions," Regional Studies, Taylor & Francis Journals, vol. 51(8), pages 1246-1258, August.
    19. Lucas Figal Garone & Alessandro Maffioli & Joao Negri & Cesar Rodriguez & Gonzalo Vázquez-Baré, 2015. "Cluster development policy, SME’s performance, and spillovers: evidence from Brazil," Small Business Economics, Springer, vol. 44(4), pages 925-948, April.
    20. Mohammad Arzaghi, 2005. "Quality Sorting and Networking: Evidence from the Advertising Agency Industry," Working Papers 05-16, Center for Economic Studies, U.S. Census Bureau.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jemstr:v:12:y:2003:i:3:p:327-362. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.kellogg.northwestern.edu/research/journals/JEMS/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.