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

Carlos Carreira () and Luís Lopes

Chapter Chapter 13 in Entrepreneurship, Human Capital, and Regional Development, 2015, pp 263-280 from Springer

Abstract: Abstract This paper analyzes the impact on firm-level total factor productivity of both agglomeration economies and regional knowledge base, using an unbalanced panel of Portuguese manufacturing firms covering the period 1996–2004. Controlling for the endogeneity using the difference generalized method of moments estimator, we found that both localization and urbanization economies have a significant and positive effect on firm productivity, 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, therefore those with higher absorptive capacity, profit more from regional knowledge than smaller ones.

Keywords: Agglomeration economies; Regional knowledge; Total factor productivity (TFP); Small firms; Firm-level studies (search for similar items in EconPapers)
Date: 2015
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Working Paper: Are Small Firms More Dependent on the Local Environment than Larger Firms? Evidence from Portuguese Manufacturing Firms (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:spr:inschp:978-3-319-12871-9_13

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DOI: 10.1007/978-3-319-12871-9_13

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