Clusters and Intercluster Spillovers: Their Influence on the Growth and Survival of Canadian Information Technology Firms

Posted: 29 Feb 2008

See all articles by Steven Globerman

Steven Globerman

Western Washington University - Center for International Business

Daniel L. Shapiro

Harvard Law School

Aidan Vining

Simon Fraser University

Date Written: February 2005

Abstract

We estimate the effects of clustering on the growth and survival of information technology (IT) firms in Canada, after controlling for firm-specific factors that might determine growth rates and survival. The results suggest that, in general, agglomeration at the regional and metropolitan levels does not influence growth rates or survival probability. However, we do find evidence that firms located in the Toronto CMA, and more specifically those located in a relatively small area within the Toronto CMA (defined by postal codes) experience faster growth. Moreover, we find that the greater the distance of other firms from these postal codes, the lower are their growth rates. In other words, the impact of clustering on growth performance is highly localized, at least for our sample period and firms. We find some limited evidence that proximity to US IT clusters has a positive effect on growth rates of Canadian IT firms. Finally, we find only very limited survivorship impacts related to location. On balance, our results suggest that the Canadian economy is too small to support many diversified clusters, and that policies directed at creating such diversity are likely to be misplaced.

Suggested Citation

Globerman, Steven and Shapiro, Daniel L. and Vining, Aidan, Clusters and Intercluster Spillovers: Their Influence on the Growth and Survival of Canadian Information Technology Firms (February 2005). Industrial and Corporate Change, Vol. 14, Issue 1, pp. 27-60, 2005, Available at SSRN: https://ssrn.com/abstract=914642

Steven Globerman (Contact Author)

Western Washington University - Center for International Business ( email )

Parks Hall 342
Bellingham, WA 98225-9170
United States
360-650-7288 (Phone)
360-650-4844 (Fax)

Daniel L. Shapiro

Harvard Law School ( email )

1575 Massachusetts
Hauser 406
Cambridge, MA 02138
United States

Aidan Vining

Simon Fraser University ( email )

8888 University Drive
Burnaby, British Columbia V5A 1S6
Canada

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