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<p>The colocation patterns of industry pairs and the locations of their business functions—such as management, R&amp;D, or production—have been considered mostly separately. We show that considering them jointly allows to better identify the determinants of agglomeration by exploiting heterogeneity across both industry pairs and business functions. While the coagglomeration of production is likely more sensitive to buyer-supplier links and labor market pooling, the coagglomeration of management and R&amp;D is likely more sensitive to shared knowledge. We empirically document that industry pairs that share more knowledge colocate more their knowledge-intensive business functions, whereas industry pairs with stronger buyer-supplier links and a more similar workforce colocate more their production business functions. High transport costs lead to less coagglomeration, and input–output links and knowledge spillovers are more important when there are fewer multiunit firms.</p>

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The heterogeneous determinants of coagglomeration: a differenced perspective

  • 期刊论文

  • 发表日期：

    2025年7月23日

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  • Kristian Behrens,
  • Rachel Guillain

摘要

The colocation patterns of industry pairs and the locations of their business functions—such as management, R&D, or production—have been considered mostly separately. We show that considering them jointly allows to better identify the determinants of agglomeration by exploiting heterogeneity across both industry pairs and business functions. While the coagglomeration of production is likely more sensitive to buyer-supplier links and labor market pooling, the coagglomeration of management and R&D is likely more sensitive to shared knowledge. We empirically document that industry pairs that share more knowledge colocate more their knowledge-intensive business functions, whereas industry pairs with stronger buyer-supplier links and a more similar workforce colocate more their production business functions. High transport costs lead to less coagglomeration, and input–output links and knowledge spillovers are more important when there are fewer multiunit firms.