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

24 Pages Posted: 17 May 2012

See all articles by Frank G. van Oort

Frank G. van Oort

University of Utrecht

Martijn J. Burger

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE); Erasmus Research Institute of Management (ERIM)

Joris Knoben

Radboud University Nijmegen - Institute for Management Research

Otto Raspe

affiliation not provided to SSRN

Date Written: July 2012

Abstract

Empirical studies in spatial economics have shown that agglomeration economies may be a source of the uneven distribution of economic activities and economic growth across cities and regions. Both localization and urbanization economies are hypothesized to foster agglomeration and growth, but recent meta‐analyses of this burgeoning body of empirical research show that the results are ambiguous. Recent overviews show that this ambiguity is fueled by measurement issues and heterogeneity in terms of scale of time and space, aggregation, growth definitions and the functional form of the models applied. Alternatively, in this paper, we argue that ambiguity may be due to a lack of research on firm‐level performance in agglomerations. This research is necessary because the theories that underlie agglomeration economies are microeconomic in nature. Hierarchical or multilevel modeling, which allows micro levels and macro levels to be modeled simultaneously, is becoming an increasingly common practice in the social sciences. As illustrated by detailed Dutch data on firm‐level productivity, employment growth and firm survival, we argue that these approaches are also suitable for reducing the ambiguity surrounding the agglomeration–firm performance relationship and for addressing spatial, sectoral and cross‐level heterogeneity.

Keywords: Agglomeration economies, Micro–macro link, Multilevel analysis, Productivity

Suggested Citation

van Oort, Frank and Burger, Martijn J. and Knoben, Joris and Raspe, Otto, Multilevel Approaches and the Firm‐Agglomeration Ambiguity in Economic Growth Studies (July 2012). Journal of Economic Surveys, Vol. 26, Issue 3, pp. 468-491, 2012. Available at SSRN: https://ssrn.com/abstract=2061501 or http://dx.doi.org/10.1111/j.1467-6419.2012.00723.x

Frank Van Oort (Contact Author)

University of Utrecht ( email )

Vredenburg 138
NL-3508 TC Utrecht, 3511 BG
Netherlands

Martijn J. Burger

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

Burg. Oudlaan 50
Rotterdam, NL 3062 PA
Netherlands

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Joris Knoben

Radboud University Nijmegen - Institute for Management Research ( email )

PO Box 9108
Nijmegen, 6500 HK
Netherlands

Otto Raspe

affiliation not provided to SSRN

Register to save articles to
your library

Register

Paper statistics

Downloads
1
Abstract Views
245
PlumX Metrics