Agglomeration externalities of fast-growth firms. Issue 2 (1st February 2021)

• Record Type: Journal Article
• Authors: Du, Jun; Vanino, Enrico
• Is Part Of: Regional studies. Volume 55:Issue 2(2021)
• Page Start: 167
• Page End: 181
• Publication Date: 2021-02-01
• Subjects: fast growth -- externalities -- firm heterogeneity -- agglomeration -- spillovers; J24 -- L52 -- R11 -- R58; Regional planning -- Periodicals; Regional planning -- Great Britain -- Periodicals; 307.14
• DOI: 10.1080/00343404.2020.1760234
• Languages: English
• ISSNs: 0034-3404

Abstract

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.