Agglomeration Economies, Firms' Spatial Organization and Innovation Performance: Some Evidence from the French Industry

There is a consensus in economic geography concerning the positive influence of agglomeration economies on innovation. Usually this is captured through the type of area in which a firm's head office (HO) of the firm is located. But the location of the firm's other units could also have an impact on innovation. This article proposes to construct different spatial profiles of firms, based on the location of their HOs and other units in three distinct types of areas, defined according to their degree of agglomeration. The influence of these firms' spatial profiles on their propensity to innovate and innovation intensity is estimated, controlling for other determinants related to structural characteristics, the firms' relations with outsiders and with their competitive environment. This study uses a sample representative of the French manufacturing firms for the year 2006. The econometric results show various effects of multi-location on firms' innovation and highlight the importance of the units in the overall technological dynamic of firms.