Agglomeration Externalities of Fast-growth Firms

Abstract

Small groups of fast-growth firms contribute disproportionately to job creation, yet little is known about their broader impact on the economy. This paper provides the first evidence of the agglomeration externalities of fast-growth firms, examining their economic impact on non-fast-growth firms operating within the same region (NUTS-2) and industry (SIC2), and through backward and forward linkages. Using comprehensive firm-level data on UK firms between 1997 and 2013, the analysis shows robust evidence of positive spillovers of fast-growth firms on the labour productivity of non-fast-growth firms in the same industry and region. However, the externalities in relation to the employment growth of non-fast-growth firms are negative, suggesting labour poaching and local competition effects.

Publication DOI: https://doi.org/10.1080/00343404.2020.1760234
Divisions: College of Business and Social Sciences > Aston Business School > Economics, Finance & Entrepreneurship
College of Business and Social Sciences > Aston Business School
Additional Information: © 2020 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group This is an Open Access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. Funding: The study was funded by the UK Economic and Social Research Council (ESRC) [grant number ES/R010129/ 5]; the Department for Business, Energy & Industrial Strategy; Innovate UK; and the British Business Bank through the UK Enterprise Research Centre (ERC).
Uncontrolled Keywords: agglomeration,externalities,fast growth,firm heterogeneity,spillovers,Environmental Science(all),Social Sciences(all)
Full Text Link:
Related URLs: https://www.tan ... 04.2020.1760234 (Publisher URL)
http://www.scop ... tnerID=8YFLogxK (Scopus URL)
PURE Output Type: Article
Published Date: 2021-02
Published Online Date: 2020-06-26
Accepted Date: 2020-05-01
Authors: Du, Jun (ORCID Profile 0000-0002-0449-4437)
Vanino, Enrico

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