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

Rikard Eriksson ()

No 1004, Papers in Evolutionary Economic Geography (PEEG) from Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography

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.

Keywords: agglomeration economies; knowledge spillovers; labor mobility; plant performance; geographical proximity; related variety (search for similar items in EconPapers)
JEL-codes: O18 Q12 R11 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2010-03, Revised 2010-03
New Economics Papers: this item is included in nep-eff, nep-geo and nep-ure
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:egu:wpaper:1004

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