Proximity and Economic Activity: An Analysis of Vendor-University Transactions.

ABSTRACT: This paper using transaction based data to provide new insights into the link between the geographic proximity of businesses and associated economic activity. It contributes to the literature by developing both two new measures of distance and a set of stylized facts on the distances between observed transactions between vendors and customers for a research intensive sector - universities. We show that spending on research inputs is more likely to be expended at businesses physically closer to universities than those farther away. That relationship is stronger for High Tech and R&D performing businesses than businesses in general, which is consistent with theories emphasizing the role of tacit knowledge. We find that firms behave in a way that is consistent with the notion that propinquity

SUBMITTER: Goldschlag N 

PROVIDER: S-EPMC6364856 | biostudies-literature | 2019 Jan

REPOSITORIES: biostudies-literature