Geographic concentration and high tech firm survival

Dakshina G. De Silva, Robert P. McComb

Research output: Contribution to journalArticlepeer-review

44 Scopus citations

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 suggest 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.

Original languageEnglish
Pages (from-to)691-701
Number of pages11
JournalRegional Science and Urban Economics
Volume42
Issue number4
DOIs
StatePublished - Jul 2012

Keywords

  • Agglomeration
  • Firm survival
  • Knowledge externalities
  • Localization

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