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Localization effects of firm startups and closures in the Netherlands

  • Corina Huisman


  • Leo van Wissen


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    In this article localization trends as a result of startups and closures are investigated in the Netherlands, using a distance-based approach. A major advantage of this method is that it does not suffer from aggregation bias that is inherent in area-based methods. This method controls for the existing spatial clustering of the industry. Plant openings and closures can either reinforce or weaken the existing localization pattern. We studied these localization tendencies for industries at the one-digit level. The major finding is that plant closures have a strong deconcentration effect, at the local as well as the regional level. Startups have a concentration effect at smaller spatial scales, but beyond 18 km this component also contributes to deconcentration. This result is in line with the spatial process of sprawl for most economic activities. However, results are different for economic sectors, and manufacturing clearly deviates from this general pattern, because it shows a localization trend except at the very small spatial level. Based on these results we do not find much support, except in the manufacturing industry, that industry dynamics in terms of new firm formation and closures, leads to stronger spatial agglomeration tendencies in the Netherlands. Copyright Springer-Verlag 2004

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

    Volume (Year): 38 (2004)
    Issue (Month): 2 (06)
    Pages: 291-310

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    Handle: RePEc:spr:anresc:v:38:y:2004:i:2:p:291-310
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