Top manager characteristics, agglomeration economies and firm performance

The role of agglomeration economies in firm performance has been extensively studied. Existing studies, however, almost invariably focus on firm, industry or city characteristics to examine the performance-enhancing effects of agglomeration while overlooking the attributes of the top executives involved in shaping corporate practices. In this study, we change that focus by empirically examining the moderating role of two particular top manager characteristics (age and educational level) on the agglomeration economies–firm performance relationship. Using a top manager-firm matched panel data set, we find that top manager age rather than educational level helps firms to realize the potential benefits of agglomeration. This paper contributes to the agglomeration literature by stating the importance of individual top managers.