Temporal status of colocation among cognitively proximate value-chain partners

Determine whether, in the Hungarian economy, the stronger geographical colocation of buyer–supplier interactions between industries that are skill related (as indicated by labor-flow-based revealed skill relatedness) is a recent development or a persistent long-run feature by analyzing changes in coagglomeration forces over time.

Background

The paper presents evidence that input–output linkages contribute to industrial coagglomeration particularly when the connected industries are skill related, suggesting reinforcement between value-chain and labor-pooling channels. Using Hungarian administrative microdata from 2015–2017, the authors corroborate these aggregate findings with firm-to-firm networks, showing steep distance decay for overlapping labor and transaction ties.

However, the available registers cover only a limited number of years, preventing a longitudinal assessment. Given related literature documenting shifts over time in the relative importance of agglomeration forces, establishing whether the observed stronger colocation among cognitively proximate value-chain partners is new or enduring is central to understanding the dynamics of coagglomeration.