# 20.49 Technological Complexity and Economic Growth of Regions

Lars Mewes & Tom Broekel

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One the one hand, complex technologies offer substantial economic benefits, and on the other, they are difficult to invent and to imitate, and they refuse a fast dissemination. This two-sidedness motivates the idea that regions’ competitive advantages and, in consequence, their economic growth, originate in their ability to produce and utilize complex technologies. However, the relationship between technological complexity and regional economic growth has rarely been empirically investigated. Here, we address this pressing issue by assessing the complexity of technological activities in 159 European NUTS 2 regions and relating it to their economic growth from 2000 to 2014. Our empirical results suggest that technological complexity is an important predictor of regional economic growth. A 10% increase in complexity is associated with a 0.45% GDP per capita growth. By showing that technological complexity is important for regional economic growth, our results fuel current policy debates about optimal regional policies such as the Smart Specialization strategy.

# 20.48 Technology network structure conditions the economic resilience of regions

Gergő Tóth, Zoltán Elekes, Adam Whittle, Changjun Lee & Dieter F. Kogler

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This paper assesses the network robustness of the technological capability base of 269 European metropolitan areas against the potential elimination of some of their capabilities. By doing so it provides systematic evidence on how network robustness conditioned the economic resilience of these regions in the context of the 2008 economic crisis. The analysis concerns calls in the relevant literature for more in-depth analysis on the link between regional economic network structures and the resilience of regions to economic shocks. By adopting a network science approach that is novel to economic geographic inquiry, the objective is to stress-test the technological resilience of regions by utilizing information on the co-classification of CPC classes listed on European Patent Office patent documents. Findings from a regression analysis indicate that metropolitan regions with a more robust technological knowledge network structure exhibit higher levels of resilience with respect to changes in employment rates. This finding is robust to various random and targeted elimination strategies concerning the most frequently combined technological capabilities. Regions with high levels of employment in industry but with vulnerable technological capability base are particularly challenged by this aspect of regional economic resilience.

# 20.47 Unleashing Innovative Power: Solving cognitive, social and geographic distance issues with informal institutional proximity

Cathrin Sollner & Dirk Fornahl

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Literature nowadays claims that innovation is no longer an only ‘one-organization-show’ but that more and more organizations conduct innovative activities in collaboration. To collaborate successfully, cognitive, social, geographic and institutional distances have to be bridged. Especially interesting is the moderating impact of informal institutions, as being at the basis of every human interaction. However, an extensive investigation is still missing. Therefore, the present research makes a first step in closing this research gap, revealing that informal institutional distances are like a diverse puzzle not to be underestimated, as each of the dimensions has different effects on different forms of distances.

# 20.46 The Emergence of Knowledge Production in New Places

Christopher R. Esposito

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This article studies how new locations emerge as advantageous places for the creation of ideas. Analysis of a novel patent-based dataset that traces the flow of knowledge between inventions and across time reveals that inventors initiate knowledge production in new places through a three-stage process. In the first stage, about 50 years before knowledge production in a region reaches an appreciable volume, local inventors begin to experiment with a few promising ideas developed in other places. In the second stage, inventors use the promising ideas developed elsewhere to create a large number of highly impactful inventions locally. In the third stage, inventors source high-impact ideas from their local environs and produce an even larger number of inventions, albeit of lower quality. Overall knowledge production in regions peaks in this third stage, but novelty and the potential for future knowledge growth decline.

# 20.45 Knowledge recombination for emerging technological innovations: the case of green shipping

Maria Tsouri , Teis Hansen , Jens Hanson & Markus Steen

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The paper explores knowledge recombination by analysing how knowledge networks in established technological fields influenced the formation of the emerging field of green shipping in the period 2007–2018. The authors build hypotheses to investigate whether important mechanisms for the evolution of single technology networks, embeddedness, proximity, and status apply across technological fields. By employing dynamic social network analysis models, they found that actors transferred knowledge across technological fields through (re)combination mechanisms, which affected the emergence of the new technological field, but in different ways. While embeddedness played an important role, status and geographical proximity were less important.

# 20.44 Do Capabilities Reside in Firms or in Regions? Analysis of Related Diversification in Chinese Knowledge Production

Yiou Zhang & David L. Rigby

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Do capabilities reside in firms, in regions, or in both? Most models of related diversification, building on the early work of Hidalgo et al. (2007), examine how the structure of economic activity within a region conditions the trajectory of diversification. Inter-regional flows are sometimes added to these models. The logic here is that capabilities are largely built-up within regions and sometimes shared between them. We challenge that logic, exploring whether capabilities are more likely to be built within the firm and to flow across spatial boundaries than they are to be built within the region flowing across firm boundaries. Analysis focuses on Chinese patent data spanning 286 cities over the period 1991 to 2015. We develop standard models of related diversification before examining how the branches of multi-locational firms diversify their knowledge portfolios. Evidence shows that the knowledge structure of firms is more important than the knowledge structure of regions in shaping branch diversification. We show that the influence of the firm and the region on diversification vary significantly between headquarters (HQ) branches and non-HQ branches of firms, and between the non-HQ branches of firms that are located in core and peripheral cities of China.

# 20.43 Improvement on the association strength: implementing a probabilistic measure based on combinations without repetition

Mathieu P.A. Steijn

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The use of co-occurrence data is common in various domains. Co-occurrence data often needs to be normalised to correct for the size-e↵ect. To this end, van Eck and Waltman (2009) recommend a probabilistic measure known as the association strength. However, this formula is based on combinations with repetition, even though in most uses self-co-occurrences are non-existent or irrelevant. A more accurate measure based on combinations without repetition is introduced here and compared to the original formula in mathematical derivations, simulations, and patent data, which shows that the original formula overestimates the relation between a pair and that some pairs are disproportionally more overestimated than others. The new measure is available in the EconGeo package for R by Balland (2016).

# 20.42 Putting human rights into regional growth agendas: Where we stand and where we ought to go

Elisa Giuliani

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This article discusses the need for more systematic consideration of business-related human rights infringements in regional economic growth policies. It discusses why human rights have been neglected in accounts of regional economic growth and proposes a three-step policy agenda to address this gap. The first step envisages the institution of regional contact points mandated to deal with business-related human rights infringements via non-judicial grievance mechanisms. The second step proposes that regions should seek to build new regional identities as ‘safe harbours’ for investors, by working towards the avoidance of harm in their territories and linking attraction and development policies (subsidies, competitive bidding schemes and other industrial policy tools) to companies’ human rights track records in order to avoid attracting and supporting ‘bad’ firms. The third step refers to the establishment of regional negotiating fora to discuss remedies for those victims of harmful conduct. In order to counter potential claims of companies’ financial incapacity to remedy human rights harms, it is suggested that local communities and their representatives openly discuss the distributive policies of the relevant companies, related to shareholder dividends, executive compensation and tax planning.

# 20.41 Cities in a Post-COVID World

Richard Florida, Andrés Rodríguez-Pose & Michael Storper

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This paper examines the effect of the COVID-19 pandemic and its related economic, fiscal, social and political fallout on cities and metropolitan regions. We assess the effect of the pandemic on urban economic geography at the intra- and inter-regional geographic scales in the context of four main forces: the social scarring instilled by the pandemic; the lockdown as a forced experiment; the need to secure the urban built environment against future risks; and changes in the urban form and system. At the macro-geographic scale, we argue the pandemic is unlikely to significantly alter the winner-take-all economic geography and spatial inequality of the global city system. At the micro-geographic scale, however, we suggest that it may bring about a series of short-term and some longer-running social changes in the structure and morphology of cities, suburbs, and metropolitan regions. The durability and extent of these changes will depend on the timeline and length of the pandemic.

# 20.40 Does cohesion policy reduce EU discontent and Euroscepticism?

Andrés Rodríguez-Pose & Lewis Dijkstra

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Some regions in Europe that have been heavily supported by the European Union’s cohesion policy have recently opted for parties with a strong Eurosceptic orientation. The results at the ballot box have been put forward as evidence that cohesion policy is ineffective for tackling the rising, European- wide wave of discontent. However, the evidence to support this view is scarce and, often, contradictory. This paper analyses the link between cohesion policy and the vote for Eurosceptic parties. It uses the share of votes cast for Eurosceptic parties in more than 63,000 electoral districts in national legislative elections in the EU28 to assess whether cohesion policy investment since 2000 has made a difference for the electoral support for parties opposed to European integration. The results indicate that cohesion policy investment is linked to a lower anti-EU vote. This result is robust to employing different econometric approaches, to considering the variety of European development funds, to different periods of investment, to different policy domains, to shifts in the unit of analysis, and to different levels of opposition by parties to the European project.