Adelheid Holl

Firm location and productivity in Spain

This paper presents an exploratory analysis of the relation between where a firm is located and its productivity. The analysis distinguishes two location characteristics measured at the municipality level: local agglomeration measured by population density and access to markets captured through market potential. The results show a significant positive relation between both local population density and market potential and firm-level productivity. The results further indicate that while productivity is higher in urban areas, the cross-sectional association between market potential and firm-level productivity appears higher outside urban areas.


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