Journal of Management Studies 2026
Seeing the Forest–Communities–Trees: Exploring the Impact of Industry Agglomerations on Technological Innovations and Firm Performance within Ecosystems
Abstract
Drawing on agglomeration theory, embeddedness theory, and the community assembly metaphor, this study examines how regional industrial ecosystems (RIEs) shape firm performance in China's manufacturing sector. Using longitudinal data on 1012 listed manufacturing firms across China between 2008 and 2019, we combine input–output analysis with geographic distance measures across low‐, medium‐, and high‐tech manufacturing industries to assess the effects of specialized (intra‐industry) and diversified (inter‐industry) agglomeration externalities on firm performance and technological innovation. We find that intra‐industry externalities are negatively associated with firm performance in RIEs, particularly through lower innovation and profitability, whereas inter‐industry externalities improve innovation, productivity, and market advantage. We argue that, in ecosystems shaped by market coordination and government industrial policy, specialized agglomerations do not necessarily enhance firm performance and may instead generate lock‐in, knowledge redundancy, and resource congestion, especially in low‐tech manufacturing. Our findings suggest that policymakers and firm managers should place greater emphasis on inter‐industry collaboration than on intra‐industry concentration in order to reduce resource competition and strengthen innovation within RIEs. These implications are particularly relevant for low‐ and medium‐tech firms, where resources are more constrained.
- DOI
- 10.1111/joms.70128
- Sources
- openalex