Urban manufacturing and the role of industrial relatedness in sustaining it: the case of the Brussels Capital Region

Abstract This paper revisits the ongoing discussion on the concept of industrial relatedness by applying it to manufacturing industries in urban areas. The analysis uses a sample of firms operating in the Brussels Capital Region area and observed over the period 2009–2015. Based on a two-step quantile regression, results show that industrial relatedness is the agglomeration force that mostly sustains the performance of urban manufacturing, whereas this is not the case for other types of agglomeration externalities. Moreover, among the measures of industrial relatedness, the input–output relationship matters more than product similarity in the perspective of a relocation of manufacturing firms in urban areas.