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Geographic concentration and high tech firm survival

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  • De Silva, Dakshina G.
  • McComb, Robert P.

Abstract

If localization economies are present, firms within denser industry concentrations should exhibit higher levels of performance than more isolated firms. Nevertheless, research in industrial organization that has focused on the influences on firm survival has largely ignored the potential effects from agglomeration. Recent studies in urban and regional economics suggest that agglomeration effects may be very localized. Analyses of industry concentration at the MSA or county-level may fail to detect important elements of intra-industry firm interaction that occur at the sub-MSA level. Using a highly detailed dataset on firm locations and characteristics for Texas, this paper analyses agglomeration effects on firm survival over geographic areas as small as a single mile radius. We find that greater firm density within very close proximity (within 1mile) of firms in the same industry increases mortality rates while greater concentration over larger distances reduces mortality rates.

Suggested Citation

  • De Silva, Dakshina G. & McComb, Robert P., 2012. "Geographic concentration and high tech firm survival," Regional Science and Urban Economics, Elsevier, vol. 42(4), pages 691-701.
    • Handle: RePEc:eee:regeco:v:42:y:2012:i:4:p:691-701
    DOI: 10.1016/j.regsciurbeco.2012.03.001
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    More about this item

    Keywords

    Firm survival; Agglomeration; Localization; Knowledge externalities;
    All these keywords.

    JEL classification:

    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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