Clustering to Coordinate: Who Benefits from Knowledge Spillovers?

40 Pages Posted: 13 Oct 2016  

William David Grieser

Texas Christian University

Gonzalo Maturana

Emory University - Goizueta Business School

Santiago Truffa

University of California, Berkeley

Date Written: October 12, 2016

Abstract

Firm clustering is positively correlated with productivity, and it exhibits significant cross-sectional variation across industries. Thus, it is important to understand the industry characteristics that drive firms’ decisions to co-locate. We develop a model of knowledge sharing and derive the prediction that riskier and more complex industries experience the greatest gains from knowledge spillovers. Using tests that account for the non-randomness of location decisions, we find a strong positive relationship between industry risk or complexity and the clustering of: 1) firms’ headquarters, 2) patent inventors, and 3) R&D expenses. Customer-supplier proximity is also significantly and positively related to industry risk and complexity.

Keywords: Agglomeration, Industrial Clustering, Knowledge Spillovers, Innovation, R&D, Investment, Customer-Supplier

JEL Classification: R1, R3, L1, O3

Suggested Citation

Grieser, William David and Maturana, Gonzalo and Truffa, Santiago, Clustering to Coordinate: Who Benefits from Knowledge Spillovers? (October 12, 2016). Available at SSRN: https://ssrn.com/abstract=2851588

William David Grieser

Texas Christian University ( email )

Fort Worth, TX 76129
United States

Gonzalo Maturana (Contact Author)

Emory University - Goizueta Business School ( email )

1300 Clifton Road
Atlanta, GA 30322-2722
United States

HOME PAGE: http://www.gonzalomaturana.com/

Santiago Truffa

University of California, Berkeley ( email )

310 Barrows Hall
Berkeley, CA 94720
United States

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