Do Agglomeration Externalities Affect Firm Survival?
Do agglomeration externalities affect firm survival? Regional Studies. This paper analyses the impact of spatial
agglomeration externalities on Italian start-up firms’ survival. Italy represents a relevant case study given the wellknown
role of firm clusters in the country’s economic development. Results obtained support the hypothesis that
industry variety reduces the likelihood of firm exit. Specifically, related variety, which contributes to the generation
and diffusion of new knowledge, has a positive effect on firm survival in manufacturing sectors, while unrelated
variety, which may work as a portfolio strategy, plays a positive role in services sectors. Localization economies
positively influence firm survival only in services sectors. Finally, urban density is not robust to the control for firm
characteristics.