Location Proximity and Productivity Spillovers: The Case of Korean Manufacturing Plants

Backhoon Song ()
Additional contact information
Backhoon Song: Sungshin Women's University Republic of Korea

Asian Economic Papers, 2015, vol. 14, issue 1, 104-118

Abstract: Knowledge spillovers have been recognized as an important source of innovation and economic growth in both industry and firm-level data. A firm may reap benefits by locating near other firms in the same geographical region. In this paper, we examine how physical proximity influences a firm's future productivity and its survival possibility. Our results indicate that a firm located in a region with a higher median total factor productivity (TFP) gains higher productivity from other firms in the same region. One possible explanation is that such a firm has more opportunity to access superior external knowledge and to produce more new ideas. Our results also indicate these productivity-enhancing characteristics do not seem to be industry-specific. Finally, we find that high productivity firms are the only significant sources of knowledge spillovers, suggesting that firms benefit most from combining their internal knowledge with the external knowledge of neighboring firms with high TFP on average. © 2015 The Earth Institute at Columbia University and the Massachusetts Institute of Technology

Keywords: knowledge; spillovers; innovation; economic growth; physical proximity; future; productivity; TFP (search for similar items in EconPapers)
JEL-codes: L00 L10 L19 L20 L25 M00 O20 O30 O35 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.mitpressjournals.org/doi/pdf/10.1162/ASEP_a_00323 link to full text PDF (application/pdf)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:tpr:asiaec:v:14:y:2015:i:1:p:104-118

Ordering information: This journal article can be ordered from
https://mitpressjour ... rnal/?issn=1535-3516

Access Statistics for this article

Asian Economic Papers is currently edited by Wing Thye Woo, Sungbae An, Fukunari Kimura and Ming Lu

More articles in Asian Economic Papers from MIT Press
Bibliographic data for series maintained by The MIT Press ().