Does institutional knowledge attract new firms in tourist districts?

This article focuses on the tourism sector, analysing the extent to which the degree of firm concentration in industry is higher or lower among the tourist districts located along the Spanish Mediterranean coastline depending on the knowledge resources generated by the institutions located at each destination (universities, vocational training centres (VTCs) and technological centres). Certain factors, such as the technical characteristics of the generated knowledge and the absorptive capacity of firms, influence the power of attraction that such institutions may exert for new firms to join the tourist district. For that reason, a U-shaped relationship between agglomeration and institutional knowledge is proposed. The empirical evidence supports this hypothesis for the knowledge generated by universities and higher-level VTCs, though not for the knowledge generated by medium-level VTCs and technological centres.