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Journal of Economic Geography Advance Access published online on August 2, 2008
Journal of Economic Geography, doi:10.1093/jeg/lbn025
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© The Author (2008). Published by Oxford University Press. All rights reserved. For Permissions, please email: journals.permissions@oxfordjournals.org

Localized mobility clusters: impacts of labour market externalities on firm performance

Rikard Eriksson* and Urban Lindgren**

*Umeå University, Department of Social and Economic Geography, SE-901 87 Umeå, Sweden. email: rikard.eriksson{at}geography.umu.se
**Umeå University, Department of Social and Economic Geography, SE-901 87 Umeå, Sweden. email: urban.lindgren{at}geography.umu.se

JEL classifications: L25, R12, R23, O18

This article analyses the impact of labour market-induced externalities on firm performance by using a unique database that connects attributes of individuals to workplaces for the entire Swedish economy. Based on the analysis of 256,985 workplaces, our results show that firms belonging to networks of local job mobility (i.e. ‘localized mobility clusters’) significantly outperform other similar firms within the local labour market. The results also indicate that concentrations of similar and related firms do not explain any considerable part of the variations in firm competitiveness. Labour market externalities derived via local job mobility produce significantly more powerful effects for the involved firms as compared to the degree of co-location, diversity and scale.

Keywords: labour mobility, agglomeration economies, firm performance, labour market networks
Date submitted: 18 June 2007     Date accepted: 13 June 2008


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