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The economic microgeography of diversity and specialization externalities – firm-level evidence from Swedish cities

Andersson, Martin; Larsson, Johan P. and Wernberg, Joakim LU (2019) In Research Policy
Abstract

We employ finely geo-coded firm-level panel data to assess the long-standing question whether agglomeration economies derive from specialization (within-industry), diversity (between-industry) or overall density. Rather than treating the city as a single unit, we focus our analysis on how the inner industry structures of cities influence firm-level productivity. Our results illustrate the co-existence of several externalities that differ in their spatial distribution and attenuation within cities. First, we find robust positive effects of neighborhood-level specialization on TFP as well as a small effect of diversity at the same fine spatial level. These effects are highly localized and dissipate beyond the immediate within-city... (More)

We employ finely geo-coded firm-level panel data to assess the long-standing question whether agglomeration economies derive from specialization (within-industry), diversity (between-industry) or overall density. Rather than treating the city as a single unit, we focus our analysis on how the inner industry structures of cities influence firm-level productivity. Our results illustrate the co-existence of several externalities that differ in their spatial distribution and attenuation within cities. First, we find robust positive effects of neighborhood-level specialization on TFP as well as a small effect of diversity at the same fine spatial level. These effects are highly localized and dissipate beyond the immediate within-city neighborhood level. Second, we also find that firms benefit from the overall density of the wider city. The results emphasize the relevance of “opening up” cities to study the workings of their inner organization and support the idea that location in a within-city industry cluster in a diversified and dense city boosts productivity.

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Please use this url to cite or link to this publication:
author
organization
publishing date
type
Contribution to journal
publication status
epub
subject
keywords
Agglomeration economies, Attenuation, Diversity, Externalities, Geocoding, Knowledge spillovers, Productivity, Specialization
in
Research Policy
publisher
Elsevier
external identifiers
  • scopus:85061793039
ISSN
0048-7333
DOI
10.1016/j.respol.2019.02.003
language
English
LU publication?
yes
id
2b09bccd-3915-4391-a696-e07f8ef7fad9
date added to LUP
2019-03-04 12:50:20
date last changed
2019-03-27 04:39:43
@article{2b09bccd-3915-4391-a696-e07f8ef7fad9,
  abstract     = {<p>We employ finely geo-coded firm-level panel data to assess the long-standing question whether agglomeration economies derive from specialization (within-industry), diversity (between-industry) or overall density. Rather than treating the city as a single unit, we focus our analysis on how the inner industry structures of cities influence firm-level productivity. Our results illustrate the co-existence of several externalities that differ in their spatial distribution and attenuation within cities. First, we find robust positive effects of neighborhood-level specialization on TFP as well as a small effect of diversity at the same fine spatial level. These effects are highly localized and dissipate beyond the immediate within-city neighborhood level. Second, we also find that firms benefit from the overall density of the wider city. The results emphasize the relevance of “opening up” cities to study the workings of their inner organization and support the idea that location in a within-city industry cluster in a diversified and dense city boosts productivity.</p>},
  author       = {Andersson, Martin and Larsson, Johan P. and Wernberg, Joakim},
  issn         = {0048-7333},
  keyword      = {Agglomeration economies,Attenuation,Diversity,Externalities,Geocoding,Knowledge spillovers,Productivity,Specialization},
  language     = {eng},
  month        = {02},
  publisher    = {Elsevier},
  series       = {Research Policy},
  title        = {The economic microgeography of diversity and specialization externalities – firm-level evidence from Swedish cities},
  url          = {http://dx.doi.org/10.1016/j.respol.2019.02.003},
  year         = {2019},
}