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Knowledge spillovers and economic performance of firms located in depressed areas: does geographical proximity matter?

  • Liliana Araújo

    ()

    (Faculdade de Economia, Universidade do Porto)

  • Sandra T. Silva

    ()

    (CEF.UP, Faculdade de Economia, Universidade do Porto)

  • Aurora A.C. Teixeira

    ()

    (CEF.UP, Faculdade de Economia, Universidade do Porto; INESC Porto, OBEGEF)

Extensive literature on the contribution of knowledge spillovers to growth and development at the regional level exists but these studies mainly features regions characterised by a high level of economic development. This paper assesses the importance of knowledge spillovers for firms located in relatively small, peripheral and economically depressed areas. Based on both primary (direct surveys to 257 firms) and secondary data, we concluded that the more relevant knowledge spillovers for firms located in a depressed region of northern Portugal (Vale do Ave) are inter-regional and international. This suggests that the contacts established with sources of knowledge from outside the region under analysis and abroad are crucial for the performance of firms. Despite the innovative intra-industry environment impacts positively on the economic performance of firms, our results convey that in such peripheral and depressed region geographical proximity is not critical for the firms’ economic performance.

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File URL: http://www.fep.up.pt/investigacao/workingpapers/wp488.pdf
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Paper provided by Universidade do Porto, Faculdade de Economia do Porto in its series FEP Working Papers with number 488.

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Length: 37 pages
Date of creation: Mar 2013
Date of revision:
Handle: RePEc:por:fepwps:488
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