Are Small Firms More Dependent on the Local Environment than Larger Firms? Evidence from Portuguese Manufacturing Firms

Carlos Carreira () and Luís Lopes

No 2012-21, GEMF Working Papers from GEMF, Faculty of Economics, University of Coimbra

Abstract: This paper analyses the impact on firm-level total factor productivity of both agglomeration economies and regional knowledge, using an unbalanced panel of Portuguese manufacturing firms covering the period 1996–2004. Controlling for the endogeneity problem using the Arellano and Bond (1991) difference GMM estimator, we found that both localization and urbanization economies have a significant and positive effect on firms’ TFP, with the latter playing the most important role. Sectoral specialization economies are important for small and medium firms, but not for large firms. However, larger firms profit more from regional knowledge than smaller ones.

Keywords: agglomeration economies; regional knowledge; total factor productivity; small firms. (search for similar items in EconPapers)
JEL-codes: O47 R11 R12 R15 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2012-12
New Economics Papers: this item is included in nep-cse, nep-eff, nep-sbm and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Chapter: Are Small Firms More Dependent on the Local Environment than Larger Firms? Evidence from Portuguese Manufacturing Firms (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:gmf:wpaper:2012-21

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