Agglomeration economies: different effects on TFP in high-tech and low-tech industries

Martin Gornig and Alexander Schiersch

Regional Studies, 2024, vol. 58, issue 11, 1999-2010

Abstract: We study the impact of agglomeration effects on firms’ total factor productivity (TFP) for industry groups defined by technology intensity. This allows for non-uniform effects on firms depending on their technological level. We find that urban economies have the largest impact on firm productivity in high-technology industries, while they have no effect in low-technology industries. For firms in the latter industries, the diversity of the local economic structure is relevant. Localisation effects have a consistently positive and significant impact on TFP, with the effect increasing with the technology intensity of the industries.

Date: 2024
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DOI: 10.1080/00343404.2024.2318454

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