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On the conceptualization of agglomeration economies: The case of new firm formation in the Dutch ICT sector

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  • Frank G. van Oort

    ()

  • Oedzge A. L. C. Atzema

    ()

Abstract

In this research we look at the factors that determine new firm formation in the information and communications technology (ICT) sector among 580 municipalities in the Netherlands. In particular, we examine the role of agglomeration economies and other locational attributes in determining where new firms locate. Both proximity (contiguous) and heterogeneous (non-contiguous) structures at the local, regional and national level are significant when considering localised firm formation. This result supports previous evidence that high-technology enterprises tend to co-locate in areas where economic activity is spatially dense. The major point of our argument is that controversial research results in the literature concerning explanatory spatial circumstances that most favorably induce dynamic and innovative externalities (to a large extent) can be attributed to the lack of consistent spatial research designs that allow the modelling of multiple spatial scale and composition effects. More specifically, we argue that the incubation hypothesis needs adjusting to the appropriate spatial levels and units of analysis: that of the agglomerated region. Finally, we argue that the lack of consistent inclusion of life-cycle aspects of firms in the present mainstream literature on dynamic externalities also contributes to controversies in research outcomes. These findings are important for spatial economic policy indicating that investment in new technologies and economic structures should enhance the prospects for spillover effects at the local level. Copyright Springer-Verlag 2004

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Bibliographic Info

Article provided by Springer in its journal The Annals of Regional Science.

Volume (Year): 38 (2004)
Issue (Month): 2 (06)
Pages: 263-290

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Handle: RePEc:spr:anresc:v:38:y:2004:i:2:p:263-290

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Cited by:
  1. Buenstorf, Guido & Klepper, Steven, 2010. "Why does entry cluster geographically? Evidence from the US tire industry," Journal of Urban Economics, Elsevier, vol. 68(2), pages 103-114, September.
  2. Henri L.F. de Groot & Jacques Poot & Martijn J. Smit, 2007. "Agglomeration, Innovation and Regional Development: Theoretical Perspectives and Meta-Analysis," Tinbergen Institute Discussion Papers 07-079/3, Tinbergen Institute.
  3. Nijkamp, P. & Stough, R. & Sahin, M., 2009. "Impact of social and human capital on business performance of migrant entrepreneurs - a comparative dutch-us study," Serie Research Memoranda 0017, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
  4. Lee, In Hyeock & Hong, Eunsuk & Sun, Laixiang, 2013. "Regional knowledge production and entrepreneurial firm creation: Spatial Dynamic Analyses," Journal of Business Research, Elsevier, vol. 66(10), pages 2106-2115.
  5. Koen Frenken & Frank G. van Oort & Thijs Verburg & Ron A. Boschma, 2004. "Variety and regional economic growth in the Netherlands," Papers in Evolutionary Economic Geography (PEEG) 0502, Utrecht University, Section of Economic Geography, revised Dec 2004.
  6. Elif Alkay & Geoffrey Hewings, 2012. "The determinants of agglomeration for the manufacturing sector in the Istanbul metropolitan area," The Annals of Regional Science, Springer, vol. 48(1), pages 225-245, February.
  7. Jacob Rubæk Holm & Christian Richter Østergaard, 2010. "Sources of Regional Resilience in the Danish ICT Sector," DRUID Working Papers 10-28, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  8. Guido Buenstorf & Christina Guenther, 2007. "No Place like Home? Location choice and firm survival after forced relocation in the German machine tool industry," DRUID Working Papers 07-16, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  9. T�zin Baycan-Levent & Peter Nijkamp & Mediha Sahin, 2009. "The Urban Growth Potential of Second-Generation Migrant Entrepreneurs - A Sectoral Study on Amsterdam," Tinbergen Institute Discussion Papers 09-026/3, Tinbergen Institute.
  10. Christ, Julian P., 2009. "New Economic Geography reloaded: localized knowledge spillovers and the geography of innovation," FZID Discussion Papers 01-2009, University of Hohenheim, Center for Research on Innovation and Services (FZID).
  11. Baltzopoulos, Apostolos & Braunerhjelm, Pontus & Tikoudis, Ioannis, 2012. "Spin-off: Individual, Firm, Industry and Regional Determinants," Working Paper Series in Economics and Institutions of Innovation 265, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
  12. Baycan-Levent, T. & Nijkamp, P. & Sahin, M., 2008. "External orientation of second generation migrant entrepreneurs : a sectoral study on Amsterdam," Serie Research Memoranda 0015, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
  13. Joeri Gorter & Suzanne Kok, 2009. "Agglomeration economies in the Netherlands," CPB Discussion Paper 124, CPB Netherlands Bureau for Economic Policy Analysis.
  14. A. Lasagni & F. Sforzi, 2007. "Locational determinants of the ICT sector across Italy," Economics Department Working Papers 2007-EP03, Department of Economics, Parma University (Italy).
  15. 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.
  16. Baltzopoulos, Apostolos, 2009. "The Firm and the Region as Breeding Grounds for Entrepreneurs," Working Paper Series in Economics and Institutions of Innovation 189, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
  17. T�zin Baycan-Levent & Peter Nijkamp & Mediha Sahin, 2009. "The Urban Growth Potential of Second-Generation Migrant Entrepreneurs - A Sectoral Study on Amsterdam," Tinbergen Institute Discussion Papers 09-026/3, Tinbergen Institute.
  18. Otto Raspe & Frank Van Oort, 2004. "ICT loves agglomeration The urban impacts of ICT in the Netherlands," ERSA conference papers ersa04p101, European Regional Science Association.
  19. Schanne, Norbert & Weyh, Antje, 2009. "What makes start-ups out of unemployment different?," IAB Discussion Paper 200904, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  20. Baltzopoulos, Apostolos, 2009. "Agglomeration Externalities and Entrepreneurship - micro-level evidence from Sweden," Working Paper Series in Economics and Institutions of Innovation 190, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.

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