Employment Growth of Small High-Technology Firms and the Role of Horizontal Clustering: Evidence from Computing Services and R&D in Great Britain 1991-2000

Posted: 14 Dec 2004 Last revised: 20 Feb 2015

See all articles by Bernard Fingleton

Bernard Fingleton

University of Cambridge - Department of Land Economy

Danilo Camargo Igliori

University of Cambridge - Department of Land Economy

Barry C. Moore

University of Cambridge

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Abstract

This paper provides new evidence that, controlling for other effects, the growth of employment in high technology SMEs depends on the initial horizontal clustering. The paper focuses on employment change over the period 1991-2000 in Computing Services and Research and Development (R&D) industries analysed at the local and county level within Great Britain. A new measure is proposed to map clustering in each sector. In the main section of the paper, spatial econometric models are estimated controlling for supply and demand side conditions, human capital, the local economic environment and spatial externalities in order to isolate the effect of initial clustering level. The estimates support the hypothesis that clustering is a cause of employment growth, although there are important differences of geographical scale at which this effect operates for the two sectors considered. The paper raises some important issues regarding the implied dynamics associated with the evolution of clustering.

Keywords: clustering, regional economics, spatial econometrics, small firms

JEL Classification: R11, R12

Suggested Citation

Fingleton, Bernard and Igliori, Danilo Camargo and Moore, Barry C., Employment Growth of Small High-Technology Firms and the Role of Horizontal Clustering: Evidence from Computing Services and R&D in Great Britain 1991-2000. Urban Studies, Vol. 41, No. 4, pp. 773-799, April 2004, Available at SSRN: https://ssrn.com/abstract=582981

Bernard Fingleton

University of Cambridge - Department of Land Economy ( email )

19 Silver Street
Cambridge, CB3 9EP
United Kingdom

Danilo Camargo Igliori (Contact Author)

University of Cambridge - Department of Land Economy ( email )

19 Silver Street
Cambridge, CB3 9EP
United Kingdom

Barry C. Moore

University of Cambridge ( email )

Trinity Ln
Cambridge, CB2 1TN
United Kingdom

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