Inter- and Intra-Firm Linkages: Evidence from Microgeographic Location Patterns

68 Pages Posted: 4 Nov 2015

See all articles by Kristian Behrens

Kristian Behrens

University of Quebec at Montreal (UQAM) - Department of Economics

Vera Sharunova

National Research University Higher School of Economics

Date Written: November 2015

Abstract

Multiunit firms can draw on internal resources, thus their plants should depend less on external agglomeration benefits than comparable standalone plants. Because interacting at a distance is costly, multiunit firms should also be geographically 'compact'. We dissect the microgeographic location patterns of hundreds of thousands of Canadian establishments and find robust evidence for these predictions: multiunit firms are compact, and their plants locate in areas offering potentially less external agglomeration benefits. Within firms, plants with stronger vertical links are geographically more central. The latter effect is stronger for plants in high transport cost industries that produce durables and source a larger share of non-homogeneous inputs. These findings suggest that vertical supply chains are important in explaining firms' internal spatial organization.

Keywords: inter-firm linkages, intra-firm linkages, microgeographic location patterns, multiunit firms, spatial organization of firms

JEL Classification: D22, L22, R12, R32

Suggested Citation

Behrens, Kristian and Sharunova, Vera, Inter- and Intra-Firm Linkages: Evidence from Microgeographic Location Patterns (November 2015). CEPR Discussion Paper No. DP10921, Available at SSRN: https://ssrn.com/abstract=2685678

Kristian Behrens (Contact Author)

University of Quebec at Montreal (UQAM) - Department of Economics ( email )

P.O. Box 8888, Downtown Station
Montreal, Quebec H3C 3P8
Canada

Vera Sharunova

National Research University Higher School of Economics ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
0
Abstract Views
522
PlumX Metrics