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Spatial concentration and firm-level innovation Evidence from Ghana

Author

Listed:
  • Anthony Krakah

    (Ghana Statistical Service)

  • Gonzague Vannoorenberghe

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))

Abstract

We analyze how the spatial concentration of economic activity affects innovation among firms in Ghana. We use the 2014 census of all establishments to map economic activity at a precise geographic level and the responses to a detailed survey of more than 5000 firms to capture measures of innovation and firm-level characteristics. We find a strong positive effect of the overall density of economic activity on innovation (urbanization economies) but a negative effect of the density of employment in an establishment’s sector (localization economies). Several questions in the survey allow us to address the issue of endogeneity and shed some light on the mechanisms. We control for many firm characteristics and confirm our results on a subsample of establishments declaring that their location is that of their founder’s origin, i.e. firms with a plausibly exogenous geographic location. We find that firms in regions with denser economic activity report less problems to access funding and knowledge, while the presence of firms in the same sector is associated with more uncertainty about the gains from innovating.

Suggested Citation

  • Anthony Krakah & Gonzague Vannoorenberghe, 2023. "Spatial concentration and firm-level innovation Evidence from Ghana," LIDAM Discussion Papers IRES 2023005, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    • Handle: RePEc:ctl:louvir:2023005
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    File URL: https://sites.uclouvain.be/econ/DP/IRES/2023005.pdf
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    innovation; development; localization; urbanization; externalities; Ghana;
    All these keywords.

    JEL classification:

    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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