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SERC/Urban and Spatial Programme Discussion Paper
The Impact of Aging and Technological Relatedness on Agglomeration Externalities: A Survival Analysis
Ron Boschma, Martin Henning and Frank Neffke November 2009
Paper No' SERCDP0036:
Full Paper (pdf)

JEL Classification: R11; C41; O30

Tags: agglomeration externalities; nursery cities; cox regression; aalen; plant survival; sweden

We study localization, urbanization, and Jacobs’ externality effects on plant survival in Sweden (1970-2004). We focus on two questions: (1) do agglomeration externalities change with the age of plants? (2) using new information about the relatedness among industries, what is the role of technological relatedness among local industries? We find that agglomeration externalities affect survival chances of plants. This effect, however, differs between corporate and non-affiliated plants. Furthermore, we find that Jacobs’ externalities benefit only young plants, whereas urbanization externalities harm plants at all ages. Localization externalities are insignificant, while the presence of related industries substantially increases survival rates.