The value of experience: The effect of managerial experience on the relationship between agglomeration and firm innovativeness

Abstract

This master’s thesis contributes to existing literature on agglomeration and firm innovativeness. Specifically, the extent to which managerial experience effects the relations between both urbanization and localization and firm innovation is examined. This study adds value to existing literature by conducting the research in South East Asia and including the moderating effect of managerial experience, as current literature on the subject is predominantly concentrated in developed economies or offer little to no specific tools which could be applied in practice. Firm-level data gathered by the World Bank Enterprise Survey is used to construct binary logistic regression models to subsequently test the drafted hypotheses. This study finds that urbanization has a positive effect on firm innovation, except for very high levels of managerial experience at which this effect turns negative. For localization the effects are the exact opposite; the effect is negative except at high levels of managerial experience.