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Geographic concentration and 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 suggests 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 1 mile) 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., 2011. "Geographic concentration and firm survival," MPRA Paper 32906, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:32906
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    1. Ajay Agarwal & Genevieve Giuliano & Christian Redfearn, 2012. "Strangers in our midst: the usefulness of exploring polycentricity," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 48(2), pages 433-450, April.
    2. Arti Grover Goswami & Somik V Lall, 2019. "Jobs and Land Use within Cities: A Survey of Theory, Evidence, and Policy," The World Bank Research Observer, World Bank, vol. 34(2), pages 198-238.
    3. Genevieve Giuliano & Sanggyun Kang & Quan Yuan, 2019. "Agglomeration economies and evolving urban form," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 63(3), pages 377-398, December.
    4. Marjan Nasir, 2013. "Agglomeration and Firm Turnover," CREB Working papers 2-2013, Centre for Research in Economics and Business, The Lahore School of Economics, revised 2013.
    5. Marjan Nasir, 2017. "Agglomeration and Firm Turnover in Punjab," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 22(1), pages 19-36, Jan-June.

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    More about this item

    Keywords

    Firm Survival; Agglomeration; Localization; and Knowledge Externalities;
    All these keywords.

    JEL classification:

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

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