Abstract.
In this research we look at the factors that determine new firm formation in the information and communications technology (ICT) sector among 580 municipalities in the Netherlands. In particular, we examine the role of agglomeration economies and other locational attributes in determining where new firms locate. Both proximity (contiguous) and heterogeneous (non-contiguous) structures at the local, regional and national level are significant when considering localised firm formation. This result supports previous evidence that high-technology enterprises tend to co-locate in areas where economic activity is spatially dense. The major point of our argument is that controversial research results in the literature concerning explanatory spatial circumstances that most favorably induce dynamic and innovative externalities (to a large extent) can be attributed to the lack of consistent spatial research designs that allow the modelling of multiple spatial scale and composition effects. More specifically, we argue that the incubation hypothesis needs adjusting to the appropriate spatial levels and units of analysis: that of the agglomerated region. Finally, we argue that the lack of consistent inclusion of life-cycle aspects of firms in the present mainstream literature on dynamic externalities also contributes to controversies in research outcomes. These findings are important for spatial economic policy indicating that investment in new technologies and economic structures should enhance the prospects for spillover effects at the local level.
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This article benefited considerably from comments on earlier versions made by participants at the 42nd European Regional Science Conference 2002 in Dortmund, participants of the workshop “Modern Entrepreneurship, Regional Development and Policy” at the Tinbergen Institute in Amsterdam (May 2003), attendants at a presentation at the Deutsches Institut für Wirtschaftfo-rschung (DIW) in Berlin (August 2003), Leo van Wissen (Rijkuniversiteit Groningen) and two anonymous referees. The usual disclaimers apply.
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van Oort, F., Atzema, O. On the conceptualization of agglomeration economies: The case of new firm formation in the Dutch ICT sector. Ann Reg Sci 38, 263–290 (2004). https://doi.org/10.1007/s00168-004-0195-8
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DOI: https://doi.org/10.1007/s00168-004-0195-8