Papers in Evolutionary Economic Geography

December 11, 2015

# 15.35 Government quality and the economic returns of transport infrastructure investment in European regions

Riccardo Crescenzi, Marco Di Cataldo, Andrés Rodríguez-Pose

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Transport infrastructure investment is a cornerstone of growth-promoting strategies. However, in the case of Europe the relevant literature is increasingly failing to find a clear link between infrastructure investment and economic performance. This may be a consequence of overlooking the role of government institutions. This paper assesses the connection between regional quality of government and the returns of different types of road infrastructure in EU regions during the period between 1995 and 2009. The results unveil a strong influence of regional quality of government on the economic returns of transport infrastructure. In weak institutional contexts, investments in motorways – the preferred option by local governments – yield significantly lower returns than the more humble but possibly more efficient secondary road. Government institutions also affect the returns of transport maintenance investment.

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October 20, 2015

# 15.34 Causal Relations between Knowledge-Intensive Business Services and Regional Employment Growth

Filed under: 2015 — Tags: , , , , — mattehartog @ 5:58 pm

Thomas Brenner, Marco Capasso, Matthias Duschl, Koen Frenken, Tania Treibich

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This paper studies the causal relations between regional employment growth in Knowledge-Intensive Business Services (KIBS) and overall regional employment growth using German labour-market data for the period 1999-2012. Adopting a recently developed technique, we are able to estimate a structural vector autoregressive model in which the causal directions between KIBS and other sectors are examined including various time lags. One main finding holds that although regional growth has a negative short-term effect on KIBS, KIBS growth has a long-term positive effect on the whole regional economy. This result confirms the claim that KIBS can play a key role in regional policies. Distinguishing between financial and non-financial KIBS, we find that financial KIBS have a procyclical effect on regional growth underlining the potential de-stabilizing effect of a large financial sector.

October 4, 2015

#15.33 Overcoming the Dualism between Adaptation and Adaptability in Regional Economic Resilience

Filed under: 2015 — Tags: , , , — mattehartog @ 11:55 pm

Xiaohui Hu, Robert Hassink

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Although regional resilience has come into fashion to understand how regional economies recover after shocks, it has suffered from dualistic thinking, which undermines its explanatory power. This article addresses this problem by developing a conceptual framework of uneven resilience of regions in a long-term perspective, on the basis of a comparative empirical analysis of adaptation and adaptability processes in two typical Chinese mining regions. This framework defines adaptation and adaptability in an evolutionary and mutually cohesive way that overcomes the traditional dualism. It also demonstrates how variations of adaptation-adaptability relationships can result in uneven regional resilience.

September 25, 2015

# 15.32 Doing evolution in economic geography

Filed under: 2015 — mattehartog @ 3:18 pm

Andy Pike, Andrew Cumbers, Stuart Dawley, Danny MacKinnon, Robert McMaster

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Evolutionary approaches in economic geography face questions about the relationships between their concepts, theories, methods, politics and policy implications. Amidst the growing but unsettled consensus that evolutionary approaches should employ plural methodologies, the aims here are, first, to identify some of the difficult issues confronting those working with different frameworks. The concerns comprise: specifying and connecting research objects, subjects and levels; handling agency and context; engaging and integrating the quantitative and the qualitative; comparing cases; and, considering politics, policy and praxis. Second, the purpose is to articulate a distinctive geographical political economy approach, methods and illustrative examples in addressing these issues. Bringing different views of evolution in economic geography into dialogue and disagreement renders methodological pluralism a means towards improved understanding and explanation rather than an end in itself. Confronting such thorny matters needs to be embedded in our research practices and supported by greater openness, more and better substantiation of our conceptual, theoretical and empirical claims, enhanced critical reflection, and deeper engagement with politics, policy and praxis.

# 15.31 How Smart is Specialisation? An Analysis of Specialisation Patterns in Knowledge Production

Filed under: 2015 — Tags: , , , — mattehartog @ 3:17 pm

Gaston Heimeriks, Pierre-Alexandre Balland

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To understand how specialisation patterns of cities differ among scientific fields, we study patterns of knowledge production in Astrophysics, Biotechnology, Nanotechnology and Organic Chemistry between 1996 and 2012. Using keywords from journal publications, we find systematic differences across scientific fields, but remarkable similarities across cities within each field. Biotechnology shows a turbulent pattern with comparative advantages that are short lasting, and with few related topics are available for research locations. Astrophysics and -in later years Nanotechnology- show a pattern of stable rankings, comparative advantages that last longer, and many related topics potentially available for research locations. Organic Chemistry has an intermediate position. Fields of knowledge production thus have fundamentally different characteristics that require different smart specialisation strategies taking into account the differences in accumulation and relatedness.

September 8, 2015

# 15.30 Relatedness through experience: On the importance of collected worker experiences for plant performance

Filed under: 2015 — Tags: , , , , — mattehartog @ 3:46 pm

Lisa Östbring, Rikard Eriksson, Urban Lindgren

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The present article aims to show that multiple cognitive dimensions exist between employees in plants and that these multiple forms of potential cognitive relatedness interact in their influence on learning and plant performance. Because the success of a firm has come to be strongly associated with its ability to use the available resources (Penrose 1959), it has become increasingly important for firms to have just the right mix of competences. In the article, the knowledge and cognitive distance between employees in knowledge-intensive business services (KIBS) is measured in multiple ways – as formal knowledge, industry experience and past knowledge exposure. The different forms of cognitive distance are entered into pooled OLS regressions with year-, industry-, region-fixed effects and interaction terms to estimate the effects of various forms of cognition on plant performance. The results suggest that past knowledge experiences and formal education offer multiple channels for knowledge integration at the workplace and that the specific labor force knowledge characteristics present at a plant condition learning. It has been further shown that the organizational structure and flexibility associated with single-plant and multi-plant firms, respectively, generate different plant performance outcomes of knowledge variety. Moreover, we conclude that the commonly found negative effects of similarity in formal education on plant performance may be reduced by high levels of similarity in historical knowledge exposure or industry experience. These effects are stronger in multi-plant firms than in single-plant firms. We also find that high levels of human capital exert a reducing influence on the negative effects of high levels of cognitive similarity.

# 15.29 Technological Relatedness and Firm Productivity: Do low and high performing firms benefit equally from agglomeration economies in China?

Filed under: 2015 — Tags: , , , — mattehartog @ 3:44 pm

Anthony J. Howell, Canfei He, Rudai Yang, Cindy Fan

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Building on the evolutionary economic geography literature, we employ the density measure introduced by ? to dynamically track the impact of technological relatedness on firm productivity. We rely on advanced quantile regression techniques to determine whether technological relatedness stimulates productivity and whether the size of the effect varies for low and high performing firms. Lastly, taking China’s economic transition into account, we test whether changes in the local industrial mix brought about by China’s market reforms enable or inhibit performance-enhancing spillovers. We show that a dynamic tradeoff exists between agglomeration costs and benefits that depends, in part, on the firm’s placement along the productivity distribution: the effect of technological relatedness reduces productivity for the least performing firms, but enhances it for better performing firms. As a result, spillovers via technological relatedness lead to improvements in the geographical welfare by intensifying the learning effect for the vast majority of co-located firms, in spite of increasing productivity disparities between the bottom and top performing firms.

# 15.28 Industry Relatedness, Agglomeration Externalities and Firm Survival in China

Filed under: 2015 — Tags: , , , — mattehartog @ 3:43 pm

Canfei He, Qi Guo, David Rigby

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The importance of agglomeration externalities for economic activities is widely recognized. Recent developments highlight the importance of industry relatedness to the performance of firms, industries and regions. This study explores the determinants of firm survival in China and tests the significance of industry relatedness using firm-level data over the period 1999-2007. Industry relatedness is developed from the co-occurrence analysis of paired industries. Results based on Cox regression models show that firms benefiting from industry relatedness and governmental supports are more likely to survive. However, the influence of relatedness varies across industries and provinces. This study highlights the significant influence of local forces on firm dynamics and enriches our understanding of regional industrial restructuring in China.

# 15.27 Firm Dynamics and Regional Inequality of Productivity in China

Canfei He, Yi Zhou

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Industrial change processes are underlying forces that determine the change of regional productivity. In developed market economies, less productive firms are more likely to exit while productive firms have more chance to enter and to survive. As a result, spatial inequality of firm dynamics will directly influence the inequality of regional productivity. This study investigates how firm dynamics would affect regional productivity using firm level data during 1998-2007 in China. We first estimate total factor productivity (TFP) for each firm based on the semi-parametric method proposed by Olley and Pakes (1996). Regional productivity is derived by weighing the firm TFP using gross industrial output. There is considerable spatial inequality of TFP paired with a trend of convergence over the time period of 1999-2007. Decomposition of TFP growth shows that firm entry, exit and survival do contribute to TFP change and their contributions vary across prefectures substantially. The between share holds the largest regional difference, as the most important factor contributing to the spatial inequality of regional TFP. The restructuring of SOEs has critically contributed to the spatial inequality of TFP by raising TFP in the traditional industrial bases and by facilitating the development of productive private and foreign sectors particularly in the coastal region. The finding indicates that resource reallocation across firms with different ownerships is the key mechanism to improve regional productivity.

August 28, 2015

# 15.26 Same Place, Same Knowledge – Same People? The Geography of Non-Patent Citations in Dutch Polymer Patents

Dominik Heinisch, Önder Nomaler, Guido Buenstorf, Koen Frenken, Harry Lintsen

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It has long been argued that geographic co-location supports knowledge spillovers. More recently, this argument has been challenged by showing that knowledge spillovers mainly flow through social networks, which may or may not be localized at various geographic scales. We further scrutinize the conjecture of geographically bounded knowledge spillovers by focusing on knowledge flows between academia and industry. Looking into citations to non-patent literature (NPL) in 2,385 Dutch polymer patents, we find that citation lags are shorter on average if Dutch rather than foreign NPLs are cited. However, when excluding individual and organizational self-citations, geographically proximate NPLs no longer diffuse faster than foreign NPLs. This suggests that knowledge is not “in the air” but transferred by mobile individuals and/or direct university-industry collaboration. Our findings moreover suggest an important role of international conferences in the diffusion of recent scientific knowledge.

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