Excerpt
June 2025, Paper: "This paper examines the extent and determinants of internal agglomeration—the spatial clustering of establishments within firms. It introduces a novel methodology that benchmarks a firm’s spatial footprint against that of comparable stand-alone firms, yielding a firm-level measure of internal agglomeration. Applied across sectors of the U.S. economy, the approach reveals that internal agglomeration is widespread but varies by industry and firm characteristics. It is more prevalent in service, non-tradable, and labor-intensive industries, and is especially pronounced among diversified firms. Among potential drivers, labor similarity consistently predicts intra-firm colocation, while input-output and knowledge linkages are less influential. These findings bring a spatial lens to corporate strategy, showing that when key resources—particularly labor—face geographic frictions, colocating related activities enhances opportunities for sharing and redeployment."