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Agglomeration economies: different effects on TFP in high-tech and low-tech industries

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  • Martin Gornig
  • Alexander Schiersch

Abstract

We study the impact of agglomeration effects on firms’ total factor productivity (TFP) for industry groups defined by technology intensity. This allows for non-uniform effects on firms depending on their technological level. We find that urban economies have the largest impact on firm productivity in high-technology industries, while they have no effect in low-technology industries. For firms in the latter industries, the diversity of the local economic structure is relevant. Localisation effects have a consistently positive and significant impact on TFP, with the effect increasing with the technology intensity of the industries.

Suggested Citation

  • Martin Gornig & Alexander Schiersch, 2024. "Agglomeration economies: different effects on TFP in high-tech and low-tech industries," Regional Studies, Taylor & Francis Journals, vol. 58(11), pages 1999-2010, November.
    • Handle: RePEc:taf:regstd:v:58:y:2024:i:11:p:1999-2010
    DOI: 10.1080/00343404.2024.2318454
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