Abstract In this chapter we estimate the effects of spatial agglomeration on KIES vertical disintegration with reference to the metropolitan area of Milan. Relying on a rich firm-level dataset, we first geo-referenciate each KIES firm by employing a GIS routine; then we define a set of distance-based density indicators counting the number of neighbouring firms located within aseries of concentric rays from each KIES firm location. Our estimates show that KIES tend to be more disintegrated as the number of neighbouring firms increases, without showing any clear process of spatial decay within five kilometres. We also find that this result is particularly strong for creative KIES, whereas the correlation for tradition al professional and technology-related ones is weaker.'