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Industrial Agglomeration And Firms’Performance: An Example Of Taiwanese Biotechnology Companies

Author

Listed:
  • KUANG-CHUNG HSU

    (Department of Economics and International Business, University of Central Oklahoma)

  • YUNGHO WENG

    (Department of Economics and International Business, University of Central Oklahoma)

  • YII-WEN LIN

    (Department of Economics and International Business, University of Central Oklahoma)

Abstract

This paper investigates how industrial agglomeration affects clustered firms’ strategies to receive better performance. We employed data from Taiwanese biotechnology firms for the years 2013–2020. Our data show that Taiwanese biotechnology firms located inside industrial parks had lower total costs, higher ratios of R&D cost shares to total costs, higher ratios of labor cost shares to total costs, and higher capital intensity than firms located outside of industrial parks. Our regression results confirmed the existence of the three benefits of agglomeration mentioned by Marshall (1920). Clustered firms should take advantage of such agglomeration by reducing the cost shares of R&D and labor and capital intensity to enable better performance.

Suggested Citation

  • Kuang-Chung Hsu & Yungho Weng & Yii-Wen Lin, 2023. "Industrial Agglomeration And Firms’Performance: An Example Of Taiwanese Biotechnology Companies," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 31, pages 113-126, June.
    • Handle: RePEc:aic:revebs:y:2023:j:31:hsuk
    DOI: 10.47743/rebs-2023-1-0006
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    References listed on IDEAS

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