The impact of aging and technological relatedness on agglomeration externalities: a survival analysis

Abstract

We study localization, urbanization and Jacobs’ externality effects on plant survival in
\nSweden (1970–2004). We focus on two questions: (i) do agglomeration externalities
\nchange with the age of plants? and (ii) what is the role of technological relatedness
\namong local industries? We find that agglomeration externalities affect survival chances
\nof plants. This effect, however, differs between corporate and non-affiliated plants.
\nFurthermore, we find that Jacobs’ externalities benefit only young plants, whereas
\nurbanization externalities harm plants at all ages. Localization externalities are insignificant,
\nwhile the local presence of technologically related industries substantially
\nincreases survival rates of plants.