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Agglomeration Effects and Performance: A Test of the Texas Lodging Industry
Articles and Chapters
  • Wilbur Chung, New York University
  • Arturs Kalnins, Cornell University School of Hotel Administration
Publication Date
10-1-2001
Abstract
While competition decreases rents for firms, the presence of competitors may create benefits. Competitors that agglomerate, that are physically proximate, may create externalities—production efficiencies or heightened demand that increases rents. When such externalities exist, then who gains from and who contributes to them? We examine how other competitors’ traits affect performance in Texas’s lodging industry. In rural markets, we find that chain hotels and larger hotels contribute to positive externalities. While expecting those hotels similar to the establishments creating these externalities to gain, we find the opposite. Independent hotels and smaller hotels gain the most. Interestingly, some establishments are harmed.
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Required Publisher Statement
© Wiley. Final version published as: Chung, W., & Kalnins, A. (2001). Agglomeration effects and performance: A test of the Texas lodging industry. Strategic Management Journal, 22(10), 969-988. doi: 10.1002/smj.178
Reprinted with permission. All rights reserved.

Citation Information

Chung, W., & Kalnins, A. (2001). Agglomeration effects and performance: A test of the Texas lodging industry[Electronic version]. Retrieved [insert date], from Cornell University, School of Hotel Administration site: http://scholarship.sha.cornell.edu/articles/656