Too close for comfort? Microgeography of agglomeration economies in the United Kingdom

The issue of whether firm productivity is affected by agglomeration externalities a longstanding area research. However, the appropriate geographical level to better detect effects economies and at which these work still unclear. Using detailed firm-level longitudinal data on 4927 manufacturing firms in United Kingdom over period 2008–2016, we investigate relation between microgeography external productivity. We compare different levels: city-wide narrowly defined neighborhoods around firm. Results from multilevel (mixed-effect) model show that urbanization play role higher aggregation, such as city, whereas localization operate finer level, within city closer neighborhood Failing control for more granular levels geography results confounding two types externalities. also provide novel evidence vary across (such age, size, productivity) location population density) characteristics.