 The Regional Firm Density and the Growth of Firms in the Portuguese Textile and Clothing IndustryRolando Vaz () Revista Galega de Economía, 2024, vol. 33, issue 3, 1-24 Abstract: This paper focuses on the relationship between the regional firm density and the growth of firms in the Portuguese textile and clothing industry to investigate how their geographic clustering influences said growth. Despite the concentration of this industry in the Northern region of Portugal in only four poles, our results show that the location of firms in the cluster is not relevant for growth when the whole industry is considered. However, disaggregate analysis shows that the clothing industry does exhibit both location externalities and cross-location effect, while textile manufacture exhibits neither. In addition, our empirical evidence reveals that the growth of firms located in the cluster is positively correlated with external finance. This result suggests that location becomes a solvency signal for firms, and, specifically, this might help to explain why textile manufacturers firms are located in the cluster. These findings are relevant for entrepreneurs and Portuguese policymakers, as it jeopardizes the optimal allocation of scarce resources in the Portuguese textile cluster. Keywords: External funding; Firm growth; Location effects; Portuguese textile industry; Textile cluster (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:sdo:regaec:v:33:y:2024:i:3_1 Access Statistics for this article More articles in Revista Galega de Economía from University of Santiago de Compostela. Faculty of Economics and Business. Contact information at EDIRC. |
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