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Employment Growth of Small High-technology Firms and the Role of Horizontal Clustering: Evidence from Computing Services and R&D in Great Britain, 1991-2000

Author

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  • Bernard Fingleton

    (Department of Land Economy, University of Cambridge, 19 Silver Street, Cambridge CB3 9EP, UK, bf100@cam.ac.uk)

  • Danilo Camargo Igliori

    (Department of Land Economy, University of Cambridge, 19 Silver Street, Cambridge CB3 9EP, UK, dci21@cam.ac.uk)

  • Barry Moore

    (Department of Land Economy, University of Cambridge, 19 Silver Street, Cambridge CB3 9EP, UK, bcml@cam.ac.uk)

Abstract

This paper provides new evidence that, controlling for other effects, the growth of employment in high-technology SMEs depends on the initial horizontal clustering. The paper focuses on employment change over the period 1991-2000 in computing services and research and development (R&D) industries analysed at the local and county level within Great Britain. A new measure is proposed to map clustering in each sector. In the main section of the paper, spatial econometric models are estimated controlling for supply- and demand-side conditions, human capital, the local economic environment and spatial externalities in order to isolate the effect of initial clustering level. The estimates support the hypothesis that clustering is a cause of employment growth, although there are important differences of geographical scale at which this effect operates for the two sectors considered. The paper raises some important issues regarding the implied dynamics associated with the evolution of clustering.

Suggested Citation

  • Bernard Fingleton & Danilo Camargo Igliori & Barry Moore, 2004. "Employment Growth of Small High-technology Firms and the Role of Horizontal Clustering: Evidence from Computing Services and R&D in Great Britain, 1991-2000," Urban Studies, Urban Studies Journal Limited, vol. 41(4), pages 773-799, April.
    • Handle: RePEc:sae:urbstu:v:41:y:2004:i:4:p:773-799
    DOI: 10.1080/0042098042000194106
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    References listed on IDEAS

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    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
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    4. Bernard Fingleton, 2000. "Spatial Econometrics, Economic Geography, Dynamics and Equilibrium: A ‘Third Way’?," Environment and Planning A, , vol. 32(8), pages 1481-1498, August.
    5. Fujita,Masahisa & Thisse,Jacques-François, 2013. "Economics of Agglomeration," Cambridge Books, Cambridge University Press, number 9781107001411, January.
    6. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
    7. Bernard Fingleton, 1992. "The Location of Employment in High-technology Manufacturing in Great Britain," Urban Studies, Urban Studies Journal Limited, vol. 29(8), pages 1265-1276, December.
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    2. Dadan Wardhana & Rico Ihle & Wim Heijman, 2020. "Farmer cooperation in agro‐clusters: Evidence from Indonesia," Agribusiness, John Wiley & Sons, Ltd., vol. 36(4), pages 725-750, October.
    3. Aziza GARSAA & Nadine LEVRATTO, 2017. "Les disparités d’évolution de l’emploi sont-elles dues à la nature des entreprises ou à leur localisation ? Une analyse multiniveaux sur les zones d’emploi françaises," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 45, pages 31-58.
    4. Adolfo Maza & Jose Villaverde, 2009. "Provincial Wages in Spain: Convergence and Flexibility," Urban Studies, Urban Studies Journal Limited, vol. 46(9), pages 1969-1993, August.
    5. Strotebeck, Falk, 2010. "The Location Quotient – Assembly and application of methodological enhancements," MPRA Paper 47988, University Library of Munich, Germany.
    6. Rivera, Liliana & Sheffi, Yossi & Welsch, Roy, 2014. "Logistics agglomeration in the US," Transportation Research Part A: Policy and Practice, Elsevier, vol. 59(C), pages 222-238.
    7. Ana Escalona-Orcao & Diego A. Barrado-Timón & Severino Escolano-Utrilla & Belén Sánchez-Valverde & Maricruz Navarro-Pérez & Mariola Pinillos-García & Luis Antonio Sáez-Pérez, 2020. "Cultural and Creative Ecosystems in Medium-Sized Cities: Evolution in Times of Economic Crisis and Pandemic," Sustainability, MDPI, vol. 13(1), pages 1-24, December.
    8. Welter, Caroline & Cypriano, Luiz & Centurião, Daniel, 2021. "Identification and Analysis of the Evolution of Local Productive Arrangements," MPRA Paper 109222, University Library of Munich, Germany, revised 30 Mar 2021.
    9. Nils Grashof & Dirk Fornahl, 2020. "To be or not to be located in a cluster? A descriptive meta-analysis of the firm-specific cluster effect," Working Papers on Innovation and Space 2020-01, Philipps University Marburg, Department of Geography.
    10. Welter, Caroline & Cypriano, Luiz & Centuriao, Daniel, 2021. "Identication and Analysis of the Evolution of Local Productive Arrangements," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 51(2), August.
    11. Morgenroth, Edgar, 2018. "Prospects for Irish Regions and Counties: Scenarios and Implications," Research Series, Economic and Social Research Institute (ESRI), number RS70.
    12. Scarborough, William J. & Crabbe, Rowena, 2021. "Place brands across U.S. cities and growth in local high-technology sectors," Journal of Business Research, Elsevier, vol. 130(C), pages 70-85.

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