Objective.

This article analyzes the spatial effects of industrial variety on employment growthand firm creation in manufactures, from 2010 t0 2019, in Mexico City’s Megalopolis.

Methodology.

Effects AE estimated using Spatial Durbin models, that allow identifying different spatial effects.

Results.

Results show positive direct spatial effects of variety on employment growth and firm creation.

Limitations.

Analysis is limited by the lack of data on technological relatedness. However, some suggestions are presented defined by the theory of smart specialization.

Originality.

The study is the first disaggregated spatial econometric analysis on the impact of industrial variety over employment and firm creation, and unique in Mexico.

Conclusions.

Industrial variety fosters employment growth and firm creation rates in the region. Manufacturing concentration also intervenes in the effects of industrial variety over these rates.

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