Spatial and cross-sectoral relationships in business entry dynamics around a highway corridor

Abstract

Inter-business networks are important components of business dynamics and spatial clusters. Extensive literature proclaims the existence of a variety of networks and benefits of diversity within. However, the literature falls short to exhibit the subsistence of connections between economic activities which invariably contribute towards entry decisions of business establishments. In this paper, using National Establishment Time Series (NETS) database, we analyse establishments entering the region around U.S.-400, largely in Kansas, across a period of 20 years (1992–2011). The establishments are categorised into 20 industrial sectors based on their economic activities. Using spatial econometric models and partial least squares regression, yearly relationships (attraction/impedance) among these categories are estimated. The results provide evidence that relationships amidst pre-existing and new-entrants are indeed significant in business entry. This can be critical in understanding and rationale of freight vehicle flows and guide towards corridor utilisation aspects. The inferred relationships could be used to understand how alterations in one sector may perturb other sectors and to inform about upgrading regional attraction, retention and growth-related policies.