INDUSTRIAL AGGLOMERATION AND FIRMS’ PERFORMANCE: AN EXAMPLE OF TAIWANESE BIOTECHNOLOGY COMPANIES
INDUSTRIAL AGGLOMERATION AND FIRMS’ PERFORMANCE: AN EXAMPLE OF TAIWANESE BIOTECHNOLOGY COMPANIES
Author(s): KUANG-CHUNG HSU, Yungho Weng, YII-WEN LINSubject(s): Business Economy / Management, Micro-Economics, Accounting - Business Administration
Published by: Editura Universităţii »Alexandru Ioan Cuza« din Iaşi
Keywords: Geographic clusters; Knowledge spillover; Biotechnology; Firm performance; Agglomeration;
Summary/Abstract: This paper investigates how industrial agglomeration affects clustered firms’ strategies to receive better performance. We employed data from Taiwanese biotechnology firms for the years 2013–2020. Our data show that Taiwanese biotechnology firms located inside industrial parks had lower total costs, higher ratios of R&D cost shares to total costs, higher ratios of labor cost shares to total costs, and higher capital intensity than firms located outside of industrial parks. Our regression results confirmed the existence of the three benefits of agglomeration mentioned by Marshall (1920). Clustered firms should take advantage of such agglomeration by reducing the cost shares of R&D and labor and capital intensity to enable better performance.
Journal: Review of Economic and Business Studies (REBS)
- Issue Year: 2023
- Issue No: 31
- Page Range: 113-126
- Page Count: 14
- Language: English
