Agglomeration Externalities of Fast-growth Firms


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.

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Divisions: College of Business and Social Sciences > Aston Business School > Centre for Personal Financial Wellbeing
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 (, 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,General Environmental Science,General Social Sciences
Publication ISSN: 1360-0591
Last Modified: 09 Jul 2024 07:08
Date Deposited: 02 Jul 2020 08:42
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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



Version: Published Version

License: Creative Commons Attribution

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