Although explanations of environmental performance in management include a geographical dimension (Buysse & Verbeke, 2003; Hart, 1995; Joy & Bansal, 2003; Sharma & Henriques, 2005; Shrivastava, 1995), this dimension has been underdeveloped in management research. In this paper, we use the theoretical lens of agglomeration economies to explain how a facility's location generates environmental performance spillovers for nearby facilities. In order to do so, geographically weighted regressions were used to study spillovers at the facility level at two different spatial scales (intra-urban and metropolitan spatial scales). Even though several theories can help to explain spillovers, agglomeration economies supply some of the precise mechanisms through which such spillovers occur at different spatial scales. Evidence suggests that environmental performance spillovers can be found in Mexican facilities at both spatial scales when environmental performance is measured as greenhouse gases.
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