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Firm Growth and Localized Knowledge Externalities

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  • Raspe, Otto
  • van Oort, Frank

Abstract

A lively debate in the literature focuses on the potential for a firm to profit from a loca-tion in a knowledge intensive context. If localized knowledge spillovers are important, firms tend to locate in proximity to capitalize on the knowledge stock of each other and knowledge institutions. We apply econometric modeling techniques that enable us to model firm level survival and (subsequent) employment growth simultaneously with different types of locally endowed knowledge externalities. We define the latent contextual concept of ‘knowledge economy’ using three manifest (measurable) dimensions. Based on the knowledge economy li-terature, we not only focus on technological externalities (‘R&D’), but we value complementa-ry indicators like the successful introduction of new products and services to the market (‘in-novation’) and indicators of skills of employees ('knowledge workers'). The latter contains the use of ICT, educational level of the workforce, and communicative and creative skills. We use employment data for manufacturing and business services firms stemming from a micro data-set of approximately 62.000 firms in the Netherlands in the period 2001-2006. We conclude on the size and knowledge related composition of the contextual effects, in which the innovation dimension turns out to be most robustly related to firm-level economic growth.

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Bibliographic Info

Article provided by Mid-Continent Regional Science Association in its journal Journal of Regional Analysis and Policy.

Volume (Year): 38 (2008)
Issue (Month): 2 ()
Pages:

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Handle: RePEc:ags:jrapmc:132349

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Web page: http://jrap-journal.org/index.htm
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Related research

Keywords: International Development;

References

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Citations

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Cited by:
  1. Broekel, Tom & Schimke, Antje & Brenner, Thomas, 2011. "The effects of cooperative R&D subsidies and subsidized cooperation on employment growth," Working Paper Series in Economics 34, Karlsruhe Institute of Technology (KIT), Department of Economics and Business Engineering.
  2. Quatraro, Francesco & Vivarelli, Marco, 2013. "Drivers of Entrepreneurship and Post-Entry Performance of Newborn Firms in Developing Countries," IZA Discussion Papers 7436, Institute for the Study of Labor (IZA).
  3. Vivarelli, Marco, 2012. "Drivers of entrepreneurship and post-entry performance : microeconomic evidence from advanced and developing countries," Policy Research Working Paper Series 6245, The World Bank.
  4. Michaela Fuchs & Udo Brixy, 2011. "How important are plant and regional characteristics for employment dynamics? Plant-level evidence for Germany," ERSA conference papers ersa10p243, European Regional Science Association.
  5. Peter van der Zwan & Ingrid Verheul & Roy Thurik & Isabel Grilo, 2009. "Entrepreneurial Progress: Climbing The Entrepreneurial Ladder in Europe and The US," Tinbergen Institute Discussion Papers 09-070/3, Tinbergen Institute, revised 17 Mar 2010.
  6. Duschl, Matthias & Schimke, Antje & Brenner, Thomas & Luxen, Dennis, 2011. "Firm growth and the spatial impact of geolocated external factors: Empirical evidence for German manufacturing firms," Working Paper Series in Economics 36, Karlsruhe Institute of Technology (KIT), Department of Economics and Business Engineering.
  7. Tom Broekel & Antje Schimke & Thomas Brenner, 2011. "The effects of cooperative R and D subsidies and subsidized cooperation on employment growth," Working Papers on Innovation and Space 2011-04, Philipps University Marburg, Department of Geography.
  8. Marco Vivarelli, 2012. "Entrepreneurship and Post-Entry Performance: the Microeconomic Evidence," DISCE - Quaderni del Dipartimento di Scienze Economiche e Sociali dises1286, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
  9. Matthias Duschl & Antje Schimke & Thomas Brenner & Dennis Luxen, 2011. "Firm Growth and the Spatial Impact of Geolocated External Factors – Empirical Evidence for German Manufacturing Firms," Working Papers on Innovation and Space 2011-03, Philipps University Marburg, Department of Geography.
  10. Vivarelli, Marco, 2012. "Entrepreneurship in Advanced and Developing Countries: A Microeconomic Perspective," IZA Discussion Papers 6513, Institute for the Study of Labor (IZA).
  11. Otto Raspe & Frank Oort, 2011. "Growth of new firms and spatially bounded knowledge externalities," The Annals of Regional Science, Springer, vol. 46(3), pages 495-518, June.

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