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Localized Spillovers and Knowledge Flows: How Does Proximity Influence the Performance of Plants?

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  • Rikard Eriksson

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Abstract

By 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.

Suggested Citation

  • Rikard Eriksson, 2010. "Localized Spillovers and Knowledge Flows: How Does Proximity Influence the Performance of Plants?," Papers in Evolutionary Economic Geography (PEEG) 1004, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Mar 2010.
  • Handle: RePEc:egu:wpaper:1004
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    File URL: http://econ.geo.uu.nl/peeg/peeg1004.pdf
    File Function: Version March 2010
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    Cited by:

    1. Andrés Rodríguez-Pose & Vassilis Tselios, 2012. "Individual Earnings and Educational Externalities in the European Union," Regional Studies, Taylor & Francis Journals, vol. 46(1), pages 39-57, February.
    2. Matias Ramirez & Xibao Li & Weifeng Chen, 2013. "Comparing the Impact of Intra- and Inter-regional Labour Mobility on Problem-solving in a Chinese Science Park," Regional Studies, Taylor & Francis Journals, vol. 47(10), pages 1734-1751, November.

    More about this item

    Keywords

    agglomeration economies; knowledge spillovers; labor mobility; plant performance; geographical proximity; related variety;

    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, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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