Agglomeration Externalities of Fast-growth Firms

Jun Du*, Enrico Vanino

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


Small groups of fast-growth firms contribute disproportionately to job creation, yet little is known about their broader impact on the economy. This paper provides the first evidence of the agglomeration externalities of fast-growth firms, examining their economic impact on non-fast-growth firms operating within the same region (NUTS-2) and industry (SIC2), and through backward and forward linkages. Using comprehensive firm-level data on UK firms between 1997 and 2013, the analysis shows robust evidence of positive spillovers of fast-growth firms on the labour productivity of non-fast-growth firms in the same industry and region. However, the externalities in relation to the employment growth of non-fast-growth firms are negative, suggesting labour poaching and local competition effects.
Original languageEnglish
Pages (from-to)167-181
Number of pages15
JournalRegional studies
Issue number2
Early online date26 Jun 2020
Publication statusPublished - Feb 2021

Bibliographical note

© 2020 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group
This is an Open Access article distributed under the terms of the Creative Commons Attribution License (, which permits unrestricted
use, distribution, and reproduction in any medium, provided the original work is properly cited.
Funding: The study was funded by the UK Economic and Social
Research Council (ESRC) [grant number ES/R010129/
5]; the Department for Business, Energy & Industrial
Strategy; Innovate UK; and the British Business Bank
through the UK Enterprise Research Centre (ERC).


  • agglomeration
  • externalities
  • fast growth
  • firm heterogeneity
  • spillovers


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