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Inter- and intra-firm linkages: Evidence from microgeographic location patterns

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  • Behrens, Kristian
  • Sharunova, Vera

Abstract

Multiunit firms can draw on internal resources, thus their plants should depend less on external agglomeration benefits than comparable standalone plants. Because interacting at a distance is costly, multiunit firms should also be geographically 'compact'. We dissect the microgeographic location patterns of hundreds of thousands of Canadian establishments and find robust evidence for these predictions: multiunit firms are compact, and their plants locate in areas offering potentially less external agglomeration benefits. Within firms, plants with stronger vertical links are geographically more central. The latter effect is stronger for plants in high transport cost industries that produce durables and source a larger share of non-homogeneous inputs. These findings suggest that vertical supply chains are important in explaining firms' internal spatial organization.

Suggested Citation

  • Behrens, Kristian & Sharunova, Vera, 2015. "Inter- and intra-firm linkages: Evidence from microgeographic location patterns," CEPR Discussion Papers 10921, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:10921
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    Cited by:

    1. Jaimovich, Esteban, 2019. "Roadways, input sourcing, and patterns of specialization," European Economic Review, Elsevier, vol. 120(C).
    2. Flora Bellone & Cilem Selin Hazir & Toshiyuki Matsuura, 2020. "Adjusting to China competition: Evidence from Japanese plant-product-level data," Working Papers hal-03086387, HAL.
    3. Bartelme, Dominick & Ziv, Oren, 2023. "JUE Insight: Firms and industry agglomeration," Journal of Urban Economics, Elsevier, vol. 133(C).
    4. Ismaëlh Cissé & Jean Dubé & Cédric Brunelle, 2020. "New business location: how local characteristics influence individual location decision?," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 64(1), pages 185-214, February.
    5. Bartelme, Dominick & Ziv, Oren, 2024. "The internal geography of firms," Journal of International Economics, Elsevier, vol. 148(C).
    6. OTAZAWA Toshimori & OHIRA Yuki & Jos VAN OMMEREN, 2018. "Inter-firm Transaction Networks and Location in a City," Discussion papers 18054, Research Institute of Economy, Trade and Industry (RIETI).

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    More about this item

    Keywords

    Inter-firm linkages; Intra-firm linkages; Microgeographic location patterns; Multiunit firms; Spatial organization of firms;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis

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