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Firm location and productivity in Spain

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Author(s): Adelheid Holl

Journal: Investigaciones Regionales
ISSN 1695-7253

Issue: 25;
Start page: 27;
Date: 2013;
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Keywords: location | agglomeration | market potential | productivity

ABSTRACT
This paper presents an exploratory analysis of the relation between where a firm is located and its productivity. The analysis distinguishes two location characteristics measured at the municipality level: local agglomeration measured by population density and access to markets captured through market potential. The results show a significant positive relation between both local population density and market potential and firm-level productivity. The results further indicate that while productivity is higher in urban areas, the cross-sectional association between market potential and firm-level productivity appears higher outside urban areas.

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