A test for the coincident economic and spatial clustering of business enterprises

This paper uses input-output data combined with point process modeling techniques to test whether enterprises linked within nominal buyer-supplier chains have a greater propensity to cluster in space than manufacturing enterprises in general. The methodology controls for the general tendency of firms to seek locations in concentrated agglomerations and isolates lates the influence of firm interdependence on spatial clustering. Our findings suggest that there is indeed an association between economic linkages and geographic clustering in our study area, but only for some types of economic clusters, mainly those that are comprised mainly of more knowledge-based or technology-intensive sectors. In general, we endeavor to show that spatial analytical methods hold considerable promise for conducting rigorous tests of industrial location questions.