If localization economies are present, fi rms within denser industry concentrations should ex- hibit higher levels of performance than more isolated fi rms. Nevertheless, research in industrial organization that has focused on the inuences on fi rm survival has largely ignored the potential effects from agglomeration. Recent studies in urban and regional economics suggests that agglomeration effcts may be very localized. Analyses of industry concentration at the MSA or county-level may fail to detect important elements of intra-industry rm interaction that occur at the sub-MSA level. Using a highly detailed dataset on rm locations and characteristics for Texas, this paper analyses agglomeration effects on fi rm survival over geographic areas as small as a single mile radius. We nd that greater fi rm 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.
|Journal||Regional Science and Urban Economics/Elsevier|
|State||Published - Oct 1 2012|