Geert Clijsters, Researcher, Diepenbeek, Belgium, Ludo Peeters, Professor, Diepenbeek, Belgium
Agglomeration economies at work - investigating the role of economic linkages and geographic proximity in determining the performance of small and medium-sized firms in the region of Flanders, Belgium (assigned to theme
This paper investigates the way in which economic linkages and geographic/spatial proximity affect the performance (productivity) of small and medium-sized manufacturing firms in the region of Flanders, Belgium, through knowledge and other spillover effects. Economic linkages are measured by (intra- and inter-industry) regionalized input-output relationships, while geographic proximity is simply defined as the physical distance between the firms involved. Specifically, a Cobb-Douglas function is specified, where productivity growth, at the firm level, is related to structural firm characteristics and other variables capturing localisation or scale economies (intra-industry relationships), activity-complex economies (inter-industry relationships), and urbanization or scope economies (e.g., heterogeneous labour force). The model thus integrates three dimensions: horizontal, vertical, and lateral integration, respectively. Also, special care is taken of the spatial specification of the model.
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