Study of Firm Agglomeration Properties using Micro Location Data

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In this study, we focus on agglomeration pattern of firms by industry in terms of spatial structure of economic activity, by using firm’s micro-location data (latitude and longitude) and distance-based index. We found that firm’s agglomeration is statistically significant for about half of the manufacturing industry within the range of about 40km. We also found that inter-firm transaction and knowledge spillover, which causes industrial agglomeration, are taken place within significantly narrow areas. The number of firms which have transaction partners away in distance is very limited and the importance of distance in inter-firm collaboration is stable regardless of prevalence of information technology.