Benefitting from co-location? Evidence from the upstream oil and gas industry

Numerous contributions study firms' clustering in space and the nexus between productivity and agglomeration. This paper analyses how different sectors and firms within the Norwegian upstream oil and gas industry benefit from regional agglomeration. Since upstream oil and gas value chains develop and produce sophisticated and highly customized knowledge-intensive goods and business-to-business services, the sector is a particularly interesting candidate for studying localized external economies. Our estimated panel data models on the value added of 1500 firms indicate that firms in the upstream oil and gas industry benefit from being co-located, particularly firms within the same subsector.