# 13.09 Spinoffs and Clustering

Russell Golman, Steven Klepper

PDF

Geographic clustering of industries is typically attributed to localized, pecuniary or non-pecuniary externalities. Recent studies across innovative industries suggest that explosive cluster growth is associated with the entry and success of spinoff firms. We develop a model to explain the patterns regarding cluster growth and spinoff formation and performance, without relying on agglomeration externalities. Clustering naturally follows from spinoffs locating near their parents. In our model, firms grow and spinoffs form through the discovery of new submarkets based on innovation. Rapid and successful innovation creates more opportunities for spinoff entry and drives a region’s growth.

# 13.08 Path dependence, place dependence, and the evolution of a patchwork economy: Evidence from Western Australia, 1981-2008

Paul Plummer, Matthew Tonts

PDF

This paper contributes to debates about that application and relevance of evolutionary concepts in the analysis of regional economies. In particular, we address the propostion that geography and history matter in shaping regional economic development by drawing on the concepts and methodology of dynamic econometrics, offering an analysis of Western Australia, 1981-2008. More specifically we test for path and place dependence using data on incomes  per capita for regions within the State. The results provide evidence of both path and place dependence, although indicate that there is a degree of heterogeneity in how places are evolving and responding to shocks.

# 13.07 Relatedness, industrial branching and technological cohesion in U.S. metropolitan areas

Jürgen Essletzbichler

PDF

This paper builds on and complements work by evolutionary economic geographers on the role of industry relatedness for regional economic development and extends this work into a number of methodological and empirical directions. First, while recent work defines relatedness through co-occurrence, this paper measures relatedness as intensity of input-output links between industry pairs. Second, this measure is employed to examine industry evolution in 360 U.S. metropolitan areas over the period 1977-1997. The paper confirms the findings of existing work: Industries are more likely to be members of and enter and less likely to exit a metropolitan industry portfolio if they are technologically related to those industries. Third, based on average industry relatedness in a metropolitan area, an employment weighted measure of metropolitan technological cohesion is developed. Changes in technological cohesion can then be decomposed into selection, entry and exit effects revealing that the change in technological cohesion is not only due to the entry and exit of related industries but employment growth in strongly related incumbent industries.

# 13.06 Creative industries from an evolutionary perspective: A critical literature review

Su-Hyun Berg and Robert Hassink

PDF

Although creative industries have been popular as a research topic among social scientists from various backgrounds, most studies lack an evolutionary, history informed perspective. Since we regard this as an important deficit, we explore whether the notions of evolutionary economic geography can contribute to analyzing and explaining the spatial dynamics of creative industries, which has not been done yet in a systematic way. We conclude that it is particularly co-evolution that could potentially be an important notion to explain the spatial dynamics of creative industries in a comparative perspective.

# 13.05 European migration, national origin and long-term economic development in the US

Andrés Rodríguez-Pose and Viola von Berlepsch

PDF

Have Irish, German or Italian settlers arriving in the US at the turn of the 20th century left an institutional trace which determines economic development differences to this day? Does the national origin of migrants matter for long-term development? This paper explores whether the distinct geographical settlement patterns of European migrants according to national origin affected economic development across US counties. It uses micro-data from the 1880 and 1910 censuses in order to identify where migrants from different nationalities settled and then regresses these patterns on current levels of economic development, using both OLS and instrumental variable approaches. The analysis controls for a number of factors which would have determined both the attractiveness of different US counties at the time of migration, as well as current levels of development. The results indicate that while there is a strong and positive impact associated with overall migration, the national origin of migrants does not make a difference for the current levels of economic development of US counties.

# 13.04 Scientific Knowledge Dynamics and Relatedness in Bio-Tech Cities

Ron Boschma, Gaston Heimeriks, Pierre-Alexandre Balland

PDF

This paper investigates the impact of scientific relatedness on knowledge dynamics in biotech at the city level during the period 1989-2008. We assess the extent to which the emergence of new research topics and the disappearance of existing topics in cities are dependent on their degree of scientific relatedness with existing topics in those cities. We make use of the rise and fall of title words in scientific publications in biotech to identify major cognitive developments within the field. We determined the degree of relatedness between 1,028 scientific topics in biotech by means of co-occurrence of pairs of topics in journal articles. We combined this relatedness indicator between topics in biotech with the scientific portfolio of cities (i.e. the topics on which they published previously) to determine how cognitively close a potentially new topic (or an existing topic) is to the scientific portfolio of a city. We analyzed knowledge dynamics at the city level by looking at the entry and exit of topics in the scientific portfolio of 276 cities in the world. We found strong and robust evidence that new scientific topics in biotech tend to emerge systematically in cities where scientifically related topics already exist, while existing scientific topics had a higher probability to disappear from a city when these were weakly related to the scientific portfolio of the city.

# 13.03 The properties of local knowledge bases and entrepreneurship: Evidence from Italian NUTS 3 regions

Alessandra Colombelli and Francesco Quatraro

PDF

This paper investigates the relationship between the creation of new firms and the properties of the local knowledge bases, like coherence, cognitive distance and variety. By combining the literature on the knowledge spillovers of entrepreneurship and that on the recombinant knowledge approach, we posit that locally available knowledge matters to the entrepreneurial process, but the type of knowledge underlying theses dynamics deserve to be analyzed. The analysis is carried out on 104 Italian NUTS 3 regions observed over the time span 1995-2011. The results confirm that local knowledge is important, and suggest that the creation of new firms in Italy is associated to the exploitation of well established technological trajectories grounded on competences accumulated over time, rather than to the commercialization of brand new knowledge.

# 13.02 Related Variety, Unrelated Variety and Technological Breakthroughs: An analysis of U.S. state-level patenting

Carolina Castaldi, Koen Frenken, Bart Los

PDF

We investigate how variety affects the innovation output of a region. Borrowing arguments from theories of recombinant innovation, we expect that related variety will enhance innovation as related technologies are more easily recombined into a new technology. However, we also expect that unrelated variety enhances technological breakthroughs, since radical innovation often stems from connecting previously unrelated technologies opening up whole new functionalities and applications. Using patent data for US states in the period 1977-1999 and associated citation data, we find evidence for both hypotheses. Our study thus sheds a new and critical light on the related-variety hypothesis in economic geography.

# 13.01 Related Variety, Unrelated Variety and Regional Functions: A spatial panel approach

Matthias Brachert, Alexander Kubis and Mirko Titze

PDF

The paper presents estimates for the impact of related variety, unrelated variety and the functions a region performs in the production process on regional employment growth in Germany. We argue that regions benefit from the existence of related activities that facilitate economic development. Thereby the sole reliance of the related and unrelated variety concept on standard industrial classifications (SIC) remains debatable. We offer estimations for establishing that conceptual progress can be made when the focus of analysis goes beyond solely considering industries. We develop an industry-function based approach of related and unrelated variety and test our hypothesis by the help of spatial panel approach. Our findings suggest that related variety as same as unrelated variety facilitate regional employment growth in Germany. However, the drivers behind these effects do differ. While the positive effect of related variety is driven by high degrees of relatedness in the regional “R&D” and “White-Collar”-functions, the effects of unrelated variety are spurred by “Blue Collar”-functions in this period.

# 12.25 Co-agglomeration of Knowledge-Intensive Business Services and Multinational Enterprises

Wouter Jacobs, Hans R.A. Koster and Frank van Oort

PDF

It has been argued that the relationship between knowledge intensive business services (KIBS) and multi-national enterprises (MNEs) within the regional economy is advantageous for urban and regional dynamics. It is likely that KIBS aim to locate proximate to (internationally operating) MNEs because of agglomeration externalities. The impact of MNEs on the birth of KIBS has rarely been examined, and the research on the new formation of KIBS has mainly adopted a case study approach, thus limiting the opportunity for generalisation. We have taken a more quantitative approach using a continuous space framework to test whether proximity is important for the co-location of KIBS and MNEs in the metropolitan area of Amsterdam in the Netherlands. Our results, controlled for other location factors, indicate that KIBS are co-agglomerated with MNEs and that the presence of a MNE significantly influences the birth of KIBS nearby, but the effect on such start-ups is considerably smaller than the positive effect of the presence of already established KIBS. We discuss the implications for urban and regional development strategies and policy initiatives.