EUKN - European Urban Knowledge Network - Agglomeration Economies and Entrepreneurship in the ICT Industry in The Netherlands

Agglomeration Economies and Entrepreneurship in the ICT Industry in The Netherlands

Introduction

This paper examines the way agglomeration economies, indicators of knowledge spillovers, affect the formation of new firms as well as growth of incumbent firms in the Dutch ICT industry.

Description

Agglomeration economies have a stronger impact on new firm formation than on the growth of incumbent firms. Concentration and diversity both have a positive effect on new firm formation as well as on the growth of incumbent firms, while competition only has a positive effect on new firm formation.

It is especially the effects of industrial diversity that are revealed to be sensitive to urban contexts: positive effects on new firm formation are attached to the connected cities and to the highly urbanized Randstad in The Netherlands, and positive effects on firm growth to the intermediate zone, the connected cities and urban municipalities.

Conclusions

The research contains three main conclusions:

In contrast to new firm formation, incumbent firm growth is not affected positively by ICT firm competition. The effects of the diversity and concentration measures are positively related to incumbent firm growth, just as with new firm formation in the ICT industry.
Incumbent firm growth in the Dutch ICT industry is not related significantly to proximity and contiguity-based spatial autocorrelation.
Most studies of location determinants emphasize employment growth in general and on innovation intensity. Relatively few studies have looked at the components of employment growth arising from firm births and growth.

Contact info

Erasmus Research Institute of Management (ERIM)
Erasmus Research Institute of Management (ERIM)

Publication date

Project finished

01/03/2006

Researcher

Frank G. van Oort and Erik Stam

Download the full research “Agglomeration Economies and Entrepreneurship in the ICT Industry” (Eng, PDF, 243 KB)

Document type

research

Themes

Urban Policy > Economy knowledge & employment > Research & innovation

Keywords

Implementation & production