Localized Spillovers and Knowledge Flows: How Does Proximity Influence the Performance of Plants?
AbstractBy means of a unique longitudinal database with information on all plants and employees in the Swedish economy, this paper analyzes how geographical proximity influences the impact of spillovers and knowledge flows on the productivity growth of plants. Concerning the effects of spillovers, we show that the density of economic activities as such mainly contributes to plant performance within a very short distance and that the composition of economic activities is more influential further away. Regarding the influence of local industrial setup, proximity increases the need to be located near different, but related, industries whereas increased distance implies a greater effect of intra-industry spillovers. The analyses also demonstrate that knowledge flows via the mobility of skilled labor is primarily a sub-regional phenomenon. Only inflows of skills that are related to the existing knowledge base of plants and come from less than 50 kilometers away have a positive effect on plant performance. Concerning outflows of skills, the results indicate that it is less harmful for a dispatching plant if a former employee remains within the local economy as compared to leaving for a job in another part of the national economy.
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Bibliographic InfoPaper provided by Utrecht University, Section of Economic Geography in its series Papers in Evolutionary Economic Geography (PEEG) with number 1004.
Length: 23 pages
Date of creation: Mar 2010
Date of revision: Mar 2010
agglomeration economies; knowledge spillovers; labor mobility; plant performance; geographical proximity; related variety;
Find related papers by JEL classification:
- R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
- Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
- O18 - Economic Development, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-03-28 (All new papers)
- NEP-EFF-2010-03-28 (Efficiency & Productivity)
- NEP-GEO-2010-03-28 (Economic Geography)
- NEP-URE-2010-03-28 (Urban & Real Estate Economics)
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