Papers in Evolutionary Economic Geography

October 14, 2021

# 21.32 Geographies of Knowledge Sourcing and the Value of Knowledge in Multilocational Firms

Filed under: 2021 — sgpetraliauunl @ 2:03 pm

Anthony Frigon & David L. Rigby

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A growing body of research in economic geography, international business management and related fields focuses on geographies of knowledge sourcing. This work examines the organizational structure of innovation activities within the firm, the mechanisms by which knowledge is extracted from various external sources and the geography of these different activities. We augment this literature by exploring knowledge sourcing within multilocational firms operating in the US using a unique dataset matching patent records to firm-level ownership and geographical data. The results add value to existing research in three ways. First, the establishments of multilocational corporations are shown to produce different kinds of knowledge in different locations. Second, the patents generated within a firm’s establishments are linked to the knowledge stocks of the cities where they operate, supporting a vision of geographical knowledge sourcing. Third, the complexity of knowledge produced within the firm as a whole is positively related to the number of establishments in which multilocational firms undertake innovation activities. In sum these data suggest that multilocational firms distribute their innovation activities across locations in order to secure access to local pools of tacit knowledge. The complexity value of firms’ knowledge production is enhanced as a result of this spatial strategy.

# 21.31 Knocking on Hell’s door. Dismantling hate with cultural consumption

Filed under: 2021 — Tags: , , , , — sgpetraliauunl @ 1:56 pm

Daria Denti, Alessandro Crociata & Alessandra Faggian 

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How local cultural activities influence development and human behaviour is gaining growing attention in economic geography.Small scale experimental evidence shows that cultural consumption is effective in countering hate. This is crucial, as hate, in turn, has a negative influence on the socioeconomic performance of places. Still, little is known on this, outside few more qualitative case studies. This paper provides a quantitative measure of the impact of cultural consumption on hate events in the Italian NUTS3 regions. IV estimation using a unique longitudinal database, with georeferenced hate manifestations and a population-based measure for cultural consumption, shows that cultural consumption determines a reduction in hate events. Our findings support the idea that cultural change acts a key enabling factor for people open-mindedness and inclusiveness of places. Moreover, our results hold even after various robustness checks, suggesting the need for policy interventions promoting cultural consumption. 

October 1, 2021

# 21.30 Local institutions and pandemics: City autonomy and the Black Death

Filed under: 2021 — Tags: , , , , — sgpetraliauunl @ 8:22 am

Han Wang & Andrés Rodríguez-Pose

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Local institutions have long been regarded as key drivers of economic development. However, little is known about the role of institutions in preparing places to cope with public health crises and pandemics. This paper sheds light on how the nature of a local institution, city autonomy, influenced variations in the incidence of the Black Death —possibly the worst pandemic ever recorded— across cities in Western Europe between 1347 and 1352. We examine urban autonomy not only because it represented a major political shift in medieval times, but because, more importantly, it also represents a key prototype of modern political institutions. By exploiting data on the spatial variation of Black Death’s mortality rates and duration using OLS and 2SLS methods, we uncover that city autonomy reduced mortality rates by, on average, almost 10 percent. Autonomous cities were in a better position to adopt swift and efficient measures against the pandemic than those governed by remote kings and emperors. This relationship has been confirmed by a series of placebo tests and robustness checks. In contrast, there is no evidence to suggest that city autonomy was a factor in reducing the duration of the pandemic in European cities.rsification to a regional level. To this end, we analyze how the regional importance of extractive industries has affected the entrance of non-extractive industries to Vietnamese provinces between 2006 and 2010. Furthermore, the study investigates to what extent region-specific conditions – that is the regional industrial profile and institutions – moderate the effect of the regional presence of extractive industries on regional diversification. Our findings reveal that extractive industries tend to constrain non-extractive industry entries on a regional level. However, the results also show that adequate regional institutions can moderate this negative effect on the regional diversification performance. Thereby the study underlines the need and value of studying the relationship between extractive industries and diversification also on a regional level.

September 28, 2021

# 21.29 The Impact of Extractive Industries on Regional Diversification: Evidence from Vietnam

Moritz Breul & Thi Xuan Thu Nguyen

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Economic diversification is perceived as imperative to reduce resource-dependent economies’ vulnerability to a broader resource curse. Despite its importance, we know surprisingly little about the relationship between natural resource-dependence and economic diversification. The few insights that exist, remain on a country-level. But, since the importance of natural resource extraction differs across regions in the same country, it would be odd to assume that the effects of extractive industries on the diversification performance would be felt evenly countrywide. Also, extractive regions in the same country can manage to develop new non-extractive industries with varying success. Understanding this relationship on a regional level is important in order to identify conditions under which diversification of extractive regions is likely to materialize. This paper therefore aims to bring the study of the relationship between extractive industries and diversification to a regional level. To this end, we analyze how the regional importance of extractive industries has affected the entrance of non-extractive industries to Vietnamese provinces between 2006 and 2010. Furthermore, the study investigates to what extent region-specific conditions – that is the regional industrial profile and institutions – moderate the effect of the regional presence of extractive industries on regional diversification. Our findings reveal that extractive industries tend to constrain non-extractive industry entries on a regional level. However, the results also show that adequate regional institutions can moderate this negative effect on the regional diversification performance. Thereby the study underlines the need and value of studying the relationship between extractive industries and diversification also on a regional level.

September 15, 2021

# 21.28 Designing Smart Specialization Policy: relatedness, unrelatedness, or what?

Ron Boschma

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A key objective of Smart Specialization Strategies (S3) is to stimulate related diversification in European regions, rather than unrelated diversification. This chapter will outline the pros and cons of S3 with a prime focus on either related or unrelated diversification. We argue it depends on the specific regional situation which type of S3 to pursue. While there are good reasons to promote related diversification in general, regions may become over-specialized or trapped in a low-complex economy that might warrant a S3 focus on unrelated diversification.

September 9, 2021

# 21.27 The impact of the six European Key Enabling Technologies (KETs) on regional knowledge creation

Colin Wessendorf, Alexander Kopka & Dirk Fornahl 

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The European Commission summarized six young General Purpose Technologies (GPTs) under the label of European Key Enabling Technologies (KETs) in 2009. GPTs are broad, pervasive and widely diffused technologies that enable knowledge creation and economic growth. This study analyzes to what extent the KETs’ structural relevance within their regional knowledge bases leads to regional knowledge creation. Additionally, we analyze whether the structural relevance and the regional knowledge presence in KETs interact with regards to regional knowledge creation. The ‘structure’ of a regional knowledge base describes the relation of all knowledge being present within a given region, while ‘structural relevance’ describes a technology’s impact on the structure. Our analysis focuses on the time period from 1986-2015 and includes Germany’s 141 Labor Market Regions (LMRs) as regional spatial units. Our database consists of patent data from which we map the structure of the regional knowledge bases, by constructing technological spaces based on technology co-occurrences on patents. The structural relevance is operationalized with the help of Social Network Analysis (SNA), by measuring the changes that the removal of KETs causes in the structure of technological spaces. Our findings indicate that KETs enable knowledge creation in different ways. They show that the effects of KETs on regional knowledge creation activities are KET-specific. Furthermore, it proves essential to distinguish between ‘knowledge presence’ and ‘structural knowledge relevance’ when addressing the innovation-spawning function of KETs. Thus, for both further research and for policy-making, it is a fundamental requirement to address KET-driven knowledge creation in particular KET-specific ways. 

# 21.26 The Geography of Breakthrough Innovation in the United States over the 20th Century

Filed under: 2021 — sgpetraliauunl @ 3:52 pm

Christopher Esposito 

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Over the 20th century, the geography of breakthrough innovation in the United States – defined as the spatial distribution of the production of patents that are both novel and impactful – underwent three broad changes. At the start of the 20th century, breakthrough innovation was concentrated in populous and knowledge-diverse metropolitan areas. By the 1930s, breakthroughs were created less frequently across the entire country and so their invention had a less distinct geography. The substantial creation of breakthroughs resumed in the 1960s and was once their invention was concentrated in large and knowledge metropolitan areas. However, during the latter part of the century the invention of breakthroughs also frequently involved long-distance collaborations between inventors. In this paper, I document these historical changes to the geography of breakthrough innovation and propose a model to explain why they occurred. The model suggests that the geography of breakthroughs is established by four factors: (1) the prevailing knowledge intensity of breakthrough inventions, (2) the distance-based frictions incurred by technologies used for collaboration, (3) the distance-based frictions incurred by the technologies used for knowledge-sourcing, and (4) the disruptiveness of the regime of technological change. I generate support for the model, and conclude the paper by discussing lessons that the 20th century’s geography of breakthrough innovation provide for anticipating possible futures for the geography of innovation in the 21st century, including in the years beyond COVID-19. 

August 31, 2021

# 21.25 Migrant Inventors as Agents of Technological Change

Filed under: 2021 — Tags: , , , , — sgpetraliauunl @ 1:02 pm

Ernest Miguelez & Andrea Morrison

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How do regions enter new and distant technological fields? Who is triggering this process? This work addresses these compelling research questions by investigating the role of migrant inventors in the process of technological diversification. Immigrant inventors can indeed act as carriers of knowledge across borders and influence the direction of technological change. We test these latter propositions by using an original dataset of immigrant inventors in the context of European regions during the period 2003-2011. Our findings show that: immigrant inventors generate positive local knowledge spillovers; they help their host regions to develop new technological specialisations; they trigger a process of unrelated diversification. Their contribution comes via two main mechanisms: immigrant inventors use their own personal knowledge (knowledge creation); they import knowledge from their home country to the host region (knowledge transfer). Their impact is maximised when their knowledge is not recombined with the local one (in mixed teams of inventors), but it is reused (in teams made by only migrant inventors). Our work contributes to the existing literature of regional diversification by providing fresh evidence of unrelated diversification for European regions and by identifying important agents of structural change. It also contributes to the literature of migration and innovation by adding fresh evidence on European regions and by unveiling some of the mechanisms of immigrants’ knowledge transmission.

August 9, 2021

# 21.24 Applying Evolutionary Economic Geography beyond case studies in the Global North: Regional diversification in Vietnam

Filed under: 2021 — Tags: , , , , — sgpetraliauunl @ 10:16 am

Moritz Breul & Fabio Pruß

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Hitherto, the path-dependent understanding of regional diversification in Evolutionary Economic Geography (EEG) has drawn largely on insights into industrialized countries. However, in the past few decades several regions in the Global South have undergone rapid structural transformations despite starting out with unfavourable regional asset bases. This raises the question as to whether the strong emphasis on endogenous capabilities in EEG also provides a sound theoretical framework for explaining these tremendous diversification dynamics. This paper therefore aims to re-evaluate the wider validity of the path-dependent conceptualization of regional diversification in the context of a lower-middle income economy. To this end, we analyse the diversification of Vietnamese regions between 2006 and 2015. In order to take into account context-specific conditions that characterize Vietnam’s economy, we add the role of foreign-owned firms and state-owned enterprises to the conceptualization of regional diversification processes. While the role of relatedness holds true for Vietnam, the presence of foreign- owned firms allowed Vietnamese regions to break away from path dependency and diversify to unrelated industries. The findings highlight that only by adapting the analysis to context-specific conditions are we able to understand how regional diversification takes place across different settings.

July 5, 2021

# 21.23 Searching through the Haystack The relatedness and complexity of priorities in smart specialisation strategies

Jason Deegan, Tom Broekel & Rune Dahl Fitjar

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This paper examines which economic domains regional policy-makers aim to develop in regional innovation strategies, focusing in particular on the complexity of those economic domains and their relatedness to other economic domains in the region. We build on the economic geography literature that advises policy-makers to target related and complex economic domains (e.g. Balland et al. (2018a), and assess the extent to which regions actually do this. The paper draws on data from the smart specialisation strategies of 128 NUTS-2 regions across Europe. While regions are more likely to select complex economic domains related to their current economic domain portfolio, complexity and relatedness figure independently, rather than in combination, in choosing priorities. We also find that regions in the same country tend to select the same priorities, contrary to the idea of a division of labour across regions that smart specialisation implies. Overall, these findings suggest that smart specialisation may be considerably less place-based in practice than it is in theory. There is a need to develop better tools to inform regions’ priority choices, given the importance of priority selection in smart specialisation strategies and regional innovation policy more broadly.

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