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CIRCLE, Center for Innovation, Research and Competences in the Learning Economy, Lund University Papers in Innovation Studies, CIRCLE, Center for Innovation, Research and Competences in the Learning Economy, Lund University

No 2015/40:
Firm Performance in the Periphery: On the Relation between Firm-Internal Knowledge and Local Knowledge Spillovers

Markus Grillitsch () and Magnus Nilsson ()

Abstract: This paper challenges one of the fundamental propositions within economic geography; that location in knowledge regions contributes to firm performance in general and especially for knowledge intensive firms that compete on the basis of knowledge. Our analysis of Swedish micro-data on 32,535 firms from 2004-2011 provides evidence that knowledge intensive firms benefit less from local knowledge spillovers than firms with comparably low in-house knowledge. This suggests that firms with high internal competencies can compensate for a lack of local knowledge spillovers and that negative knowledge externalities may make location outside knowledge centers more beneficial for such firms.

Keywords: periphery; firm performance; spillovers; agglomeration; (follow links to similar papers)

JEL-Codes: O30; R10; R11; (follow links to similar papers)

37 pages, October 23, 2015

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