Growth of new firms and spatially bounded knowledge externalities

Abstract

If localized knowledge spillovers are important, new firms will tend to locate in proximity of one another, as well as other knowledge sources, in order to capitalize on external knowledge stocks. Although theories that emphasize knowledge spillovers thus present the urban and regional character of a firm's proximity to knowledge sources as a stylized fact, the microfoundations of economic growth in agglomerations are among the most anticipated issues in urban economic research. In this paper, we define knowledge-intensive environments along several dimensions, and analyze new firms' survival and growth at the individual level. We apply multilevel regression to avoid potential estimation biases, and use firm-level data for newly established manufacturing and business services firms over the period of 2001-2006 in the Netherlands. We find that the urban knowledge context significantly relates to firmlevel employment growth, but that this is conditioned by heterogeneous features of the firm population and knowledge externalities, including (a) industries-more in services than in manufacturing; (b) types of knowledge context-more positively related to (non-technical) innovation than to (technologically) R&D related variables; and (c) types of post entry process-different for survival and growth. We also find significant interaction effects between the growth of R&D-specialized firms with university presence. JEL Classification

Entrepreneurship and the determinants of firm survival within regions: human capital, growth motivation and locational conditions

“…Research considering the particular characteristics of industries have suggested a number of influences that are often interrelated: the level of competition, clustering, stage of industry cycle, technological intensiveness, barriers to entry, as well as demand conditions and a minimum efficient scale (Cefis and Marsili 2005;Fritsch, Brixy, and Falck 2006;Helmers and Rogers 2008;Wennberg and Lindqvist 2010;Raspe and van Oort 2011). In terms of competition, where entry and exit costs are higher and involve a greater sunk component, the probability of failure is reduced (Helmers and Rogers 2008;Fotopoulos and Louri 2000).…”

Multilevel Approaches and the Firm‐Agglomeration Ambiguity in Economic Growth Studies

“…The growing importance of transaction-based explanations of local economic productivity growth is a logical outcome of the interaction between urban economies and knowledge-based service industries, and these explanations have become more important recently (Raspe and Van Oort 2011).…”

“…We tested for the average regional number of bankruptcies (1994)(1995)(1996)(1997)(1998)(1999)(2000)(2001)(2002)(2003)(2004)(2005)(2006), a sectoral 'new economy' variable (Audretsch and Dohse 2007), and for individual-level size-quadrat specifications. One can hypothesize that they have an effect on survival, but not on growth per se (Raspe and Van Oort 2011). The test gave us insight into the fact that controlling for selection bias does not improve the models significantly (although the instruments can be significant, the correction factor is not significant or is only slightly significant).…”

Knowledge flows, externalities and innovation networks

“…Traditionally measures of regional knowledge stock are on the right-hand side of the equation and firm patents or total factor productivity on the left (Malmberg, Malmberg, & Lundequist, 2000;Raspe & van Oort, 2011). Although informative, this provides a simplistic representation of the dynamics at work, calling for further measurement efforts.…”