Neighborhood Matters: Firms Thrive in Tight-Knit Communities
This study explores how businesses' productivity is influenced by living close to other businesses in the UK. Researchers analyzed data from nearly 5000 manufacturing companies between 2008 and 2016. They zoomed into different levels, like cities and neighborhoods, to see how being near other businesses affects productivity. The study found that big-picture benefits like city living positively impact productivity, while more nearby effects, like being close to other businesses, help too. Ignoring these different levels might mix up these two types of benefits. The study also showed that these benefits vary based on factors like the age, size, and productivity of the business, and where it's located in terms of population density.