Tech Firm Births and Agglomeration Economies: (Un)Related Variety, Specialization, and Spatial Externalities

Xiong, N., Wei, Y. D., & Wu, Y.

Cities · 2023

Publisher Google Scholar

Contribution

Agglomeration economies are not one uniform local advantage. The study distinguishes four forms of agglomeration and their spatial reach, showing why the type of externality and the scale of analysis must be considered together when explaining tech firm births.

Findings and approach

  • Specialization and related variety are associated with firm births at both neighborhood and city-wide scales.
  • Specialization is more pronounced at the neighborhood scale and has a broader spatial reach than related variety.
  • Unrelated variety has no detected effect across the tested scales; urbanization economies operate negatively only at the city-wide scale.
Specialization and related variety act at neighborhood and city-wide scales; unrelated variety shows no detected effect; urbanization economies act negatively only city-wide.
Conceptual illustration, not an empirical map or statistical plot.