Localized Mobility Clusters: Impacts of Labour Market Externalities on Firm Performance

Posted: 15 Dec 2008

See all articles by Rikard Eriksson

Rikard Eriksson

Stockholm School of Economics - Stockholm Institute of Transition Economics (SITE)

Urban Lindgren

Umeå University

Date Written: January 2009

Abstract

This article analyses the impact of labour market-induced externalities on firm performance by using a unique database that connects attributes of individuals to workplaces for the entire Swedish economy. Based on the analysis of 256,985 workplaces, our results show that firms belonging to networks of local job mobility (i.e. ‘localized mobility clusters’) significantly outperform other similar firms within the local labour market. The results also indicate that concentrations of similar and related firms do not explain any considerable part of the variations in firm competitiveness. Labour market externalities derived via local job mobility produce significantly more powerful effects for the involved firms as compared to the degree of co-location, diversity and scale.

Keywords: labour mobility, agglomeration economies, firm performance, labour market networks

JEL Classification: L25, R12, R23, O18

Suggested Citation

Eriksson, Rikard and Lindgren, Urban, Localized Mobility Clusters: Impacts of Labour Market Externalities on Firm Performance (January 2009). Journal of Economic Geography, Vol. 9, Issue 1, pp. 33-53, 2009, Available at SSRN: https://ssrn.com/abstract=1315934 or http://dx.doi.org/lbn025

Rikard Eriksson (Contact Author)

Stockholm School of Economics - Stockholm Institute of Transition Economics (SITE) ( email )

P.O. Box 6501
S-113 83 Stockholm, 11383
Sweden

Urban Lindgren

Umeå University

UNIVERSITETSTORGET 4
907 36 Umeå
Sweden

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