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Firm heterogeneity, productivity and spatially bounded knowledge externalities

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  • Raspe, Otto
  • van Oort, Frank G.

Abstract

In this paper, we argue that conceptually disentangling the 'context versus composition' aspects of regional growth is a multilevel issue. By applying multilevel models (also called random-effects models), we show (1) the importance of considering firm-specific characteristics simultaneously with region-specific characteristics, as we find that a large part of what is traditionally assigned to the impact of the region should be assigned to firm-specific characteristics and (2) that existing single-level methodologies can be problematic, as they are vulnerable to the charge of estimating significance levels that are too liberally assigned and promote exaggerations. This is illustrated empirically by showing that single-level approaches would lead to the conclusion that innovation spillovers are highly significant in a setting of Dutch urban growth differentials, while multilevel analyses shows less liberally assigned significance levels. We conclude that multilevel-effect models better fit research questions that combine firm and spatial characteristics simultaneously, especially because they allow firm-specific characteristics to be differently linked to their regional contexts.

Suggested Citation

  • Raspe, Otto & van Oort, Frank G., 2011. "Firm heterogeneity, productivity and spatially bounded knowledge externalities," Socio-Economic Planning Sciences, Elsevier, vol. 45(1), pages 38-47, March.
  • Handle: RePEc:eee:soceps:v:45:y:2011:i:1:p:38-47
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    References listed on IDEAS

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    Cited by:

    1. Sam Tavassoli & Lars Bengtsson & Charlie Karlsson, 2017. "Strategic entrepreneurship and knowledge spillovers: spatial and aspatial perspectives," International Entrepreneurship and Management Journal, Springer, vol. 13(1), pages 233-249, March.
    2. Marina Van Geenhuizen & Pieter Stek, 2015. "Mapping innovation in the global photovoltaic industry: a bibliometric approach to cluster identification and analysis," ERSA conference papers ersa15p697, European Regional Science Association.
    3. Aiello, Francesco & Pupo, Valeria & Ricotta, Fernand, 2011. "Explaining TFP at firm level in Italy. Does location matter?," MPRA Paper 35656, University Library of Munich, Germany.
    4. Francesco Aiello & Fernanda Ricotta, 2014. "Firm heterogeneity in productivity across Europe. What explains what?," ERSA conference papers ersa14p808, European Regional Science Association.
    5. Agostino, Mariarosaria & Nifo, Annamaria & Trivieri, Francesco & Vecchione, Gaetano, 2016. "Total factor productivity heterogeneity: channelling the impact of institutions," MPRA Paper 72759, University Library of Munich, Germany.
    6. Francesco Aiello & Valeria Pupo & Fernanda Ricotta, 2014. "Explaining Total Factor Productivity at Firm Level in Italy: Does Location Matter?," Spatial Economic Analysis, Taylor & Francis Journals, vol. 9(1), pages 51-70, March.
    7. Anna Ferragina & Fernanda Mazzotta, 2015. "Agglomeration economies in Italy: impact on heterogeneous firms’ exit in a multilevel framework," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 42(4), pages 395-440, December.
    8. Aiello, Francesco & Pupo, Valeria & Ricotta, Fernanda, 2013. "Firm heterogeneity in TFP, sectoral innovation and geography. Evidence from Italy," MPRA Paper 48573, University Library of Munich, Germany.
    9. repec:tou:journl:v:45:y:2017:p:31-58 is not listed on IDEAS
    10. Mahlberg, Bernhard & Freund, Inga & Crespo Cuaresma, Jesús & Prskawetz, Alexia, 2013. "The age-productivity pattern: Do location and sector affiliation matter?," ECON WPS - Vienna University of Technology Working Papers in Economic Theory and Policy 01/2013, Vienna University of Technology, Institute for Mathematical Methods in Economics, Research Group Economics (ECON).
    11. Biggiero, Lucio & Angelini, Pier Paolo, 2015. "Hunting scale-free properties in R&D collaboration networks: Self-organization, power-law and policy issues in the European aerospace research area," Technological Forecasting and Social Change, Elsevier, vol. 94(C), pages 21-43.
    12. repec:eee:joecag:v:1-2:y:2013:i::p:72-82 is not listed on IDEAS

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