Scandinavian Working Papers in Economics

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

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

Markus Grillitsch () and Magnus Nilsson ()
Additional contact information
Markus Grillitsch: CIRCLE, Lund University
Magnus Nilsson: Dept. of Business Administration and CIRCLE, Lund University

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

JEL-codes: O30; R10; R11

37 pages, October 23, 2015

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201540_Grillitsch_Nilsson.pdf PDF-file 

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