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Urban Vibrancy and Corporate Growth
Author(s) -
DOUGAL CASEY,
PARSONS CHRISTOPHER A.,
TITMAN SHERIDAN
Publication year - 2015
Publication title -
the journal of finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 18.151
H-Index - 299
eISSN - 1540-6261
pISSN - 0022-1082
DOI - 10.1111/jofi.12215
Subject(s) - real estate , economies of agglomeration , investment (military) , stock (firearms) , monetary economics , economics , cash flow , business , economic geography , labour economics , finance , microeconomics , geography , archaeology , politics , political science , law
We find that a firm's investment is highly sensitive to the investments of other firms headquartered nearby, even those in very different industries. A firm's investment also responds to fluctuations in the cash flows and stock prices ( q ) of local firms outside its sector. These patterns do not appear to reflect exogenous area shocks such as local shocks to labor or real estate values, but rather suggest that local agglomeration economies are important determinants of firm investment and growth.