Papers in Evolutionary Economic Geography

June 16, 2017

# 17.15 Co-inventor Networks and Knowledge Production in Specialized and Diversified Cities

Filed under: 2017 — Tags: , , , , , — mattehartog @ 6:44 pm

Frank van der Wouden, David L. Rigby

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Why do some cities produce more knowledge than others? The standard explanation rests upon the social networks that connect economic actors, within and between cities, and that structure the quantity and the quality of interactions from which new ideas are generated. These interactions are increasingly understood as shaped by different forms of proximity that congeal, at different times in different places, in complex assemblies that give rise to different forms of competitive advantage. Recent research focusing on the U.S. urban system has shown that metropolitan regions characterized by more extensive local and non-local network ties outperform cities where economic agents are isolated. However, across most of this work, little attention is given to the character of the local knowledge base and whether that is related to the structure of co-inventor networks. In this paper, we show that the social networks linking co-inventors differ between cities that produce specialized knowledge and those that produce diversified knowledge. These ideas are extended in models of tie-formation that show inventors in specialized cities value spatial proximity less and cognitive proximity more than inventors in diversified cities as they partner with collaborators from other urban areas.

# 17.14 Promoting regional growth and innovation: relatedness, revealed comparative advantage and the product space

Filed under: 2017 — Tags: , , , — mattehartog @ 6:43 pm

Gloria Cicerone, Philip McCann, Viktor A. Venhorst

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We adapt the product-space methodological approach of Hausmann and Klinger to the case of Italian provinces and regions in order to examine the extent to which the network connectedness and centrality of a province’s exports is related to its economic performance. We construct a new Product Space Position (PSP) index which retains many of the Hausmann-Klinger features but which is also much better suited to handling regional and provincial data. We also compare PSP performance with two other export composition indices. A better positioning in the export-network product space is indeed associated with a better local economic outcomes.

# 17.13 Technological Coherence and the Adaptive Resilience of Regional Economies

Filed under: 2017 — Tags: , , , , — mattehartog @ 6:42 pm

Silvia Rocchetta, Andrea Mina

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This paper explores the effect of different regional technological profiles on the resilience of regional economies to exogenous shocks. We conduct an empirical examination of the determinants of resilience through panel analyses of UK NUTS III level data for the 2004-2012 period. The results indicate that regions endowed with technologically coherent – and not simply diversified – knowledge bases are better prepared to face an unforeseen downturn and display resilience. Moreover, local economies tend to be more adaptable if they innovate in sectors with the strongest growth opportunities, even though firms’ net entry does not appear to contribute significantly towards resilience.

# 17.12 Knowledge bases and relatedness: A study of labour mobility in Norwegian regions

Filed under: 2017 — mattehartog @ 6:41 pm

Rune Dahl Fitjar, Bram Timmermans

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Two ideas have emerged as central in evolutionary economic geography in recent years: First, innovation is often the result of meetings between related ideas, and regions are therefore best served by hosting a variety of related industries. Second, innovation often comes from the combination of different knowledge bases. However, there have been few attempts at linking these approaches in empirical studies. This paper connects the dots by examining relatedness among industries with similar and different knowledge bases in specific regional contexts. We focus on regions expected to have different types of innovation systems, from the organisationally thick and diversified RIS of large cities through the more specialised RIS in intermediate cities to the organisationally thin RIS found in small rural regions. The analysis finds that industries with different knowledge bases are related in various regional settings, with combinatorial knowledge base industries having a central role in many regions. However, there are also cases of potential lock-in, where relatedness is mainly found among regions with the same knowledge base.

June 1, 2017

# 17.11 Critical links in knowledge networks – What about proximities and gatekeeper organizations?

Filed under: 2017 — Tags: , , , , — mattehartog @ 5:08 pm

Tom Broekel and Wladimir Mueller

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The paper analyzes links in knowledge networks that are essential for the integration and knowledge diffusion properties of the entire network. By focusing on critical links, as defined in network science, we evaluate these links’ properties from the perspective of the proximity and regional gatekeeper literature. We thereby gain insights into likely conditions of their emergence and functions. Moreover, we extend the dyadic perspective on regional gatekeeper organizations and link it more strongly to the network science and proximity framework literature. An empirical study applies these arguments and investigates the proximity characteristics of critical links in 132 technology-specific subsidized knowledge networks in Germany. The results show that critical links tend be formed between regional gatekeepers that offer related knowledge resources. The links bridge institutional distances by utilizing the benefits of geographic and social proximity.

# 17.10 Local Discoveries and Technological Relatedness: the Role of Foreign Firms

Filed under: 2017 — Tags: , , , , — mattehartog @ 5:07 pm

Alessia Lo Turco and Daniela Maggioni

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We explore the role of local intra and extra-regional product-specific capabilities in foster ing the introduction of new products by firms active in the Turkish manufacturing sector. We model firms’ product additions to their product basket as dependent on extra and intra-regional knowledge. We find that regional “discoveries”, that is newly introduced products never produced before in the region, are positively and significantly affected by external related knowledge spurring from foreign firms active in the same location as well as by firm internal capabilities. Technologically related intra-regional knowledge spillovers and extra-regional knowledge spilling from imported inputs do not play a relevant role. The former, however, matter when we extend the analysis to all new products introduced by firms, regardless of their previous presence in the regional production basket. We interpret this evidence as foreign affiliates bringing new and exclusive capabilities which are missing in the region where they locate, thus providing a stimulus for regional production diversification and upgrading. This hypothesis is validated by exploring the heterogeneous role of the different intra and extra-regional knowledge sources according to products’ complexity.

May 9, 2017

# 17.09 Economic Geography in R: Introduction to the EconGeo package

Pierre-Alexandre Balland

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The R statistical software is increasingly used to perform analysis on the spatial distribution of economic activities. It contains state-of-the-art statistical and graphical routines not yet available in other software such as SAS, Stata, or SPSS. R is also free and open-source. Many graduate students and researchers, however, find programming in R either too challenging or end up spending a lot of their precious time solving trivial programming tasks. This paper is a simple introduction on how to do economic geography in R using the EconGeo package (Balland, 2017). Users do not need extensive programming skills to use it. EconGeo allows to easily compute a series of indices commonly used in the fields of economic geography, economic complexity, and evolutionary economics to describe the location, distribution, spatial organization, structure, and complexity of economic activities. Functions include basic spatial indicators such as the location quotient, the Krugman specialization index, the Herfindahl or the Shannon entropy indices but also more advanced functions to compute different forms of normalized relatedness between economic activities or network-based measures of economic complexity. By opening and sharing the codes used to compute popular indicators of the spatial distribution of economic activities, one of the goals of this package is to make peer-reviewed empirical studies more reproducible by a large community of researchers.

April 24, 2017

# 17.08 The pattern of structural change: testing the Product Space framework

Filed under: 2017 — mattehartog @ 5:34 pm

Nicola D. Coniglio, Raffaele Lagravinese, Davide Vurchio, Massimo Armenise

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The set of available local ‘capabilities’ determines what an economy produces today (its static comparative advantage) and, at the same time, defines the trajectories that the process of structural change may take in the future. The Product Space (PS) framework developed in recent seminal works by economists and physicists suggests that path dependence characterizes the evolution of the production basket (Hausmann and Klinger, 2007; Hidalgo et al. 2007). These authors represent economies as sets of productive capabilities that can be combined in different ways to produce different products. Countries progressively change their production baskets and move towards goods that require capabilities that are already available; on the contrary radical structural change rarely happens. In this paper, we analyse the evolution over time of the production baskets in 107 Italian provinces (NUTS 3) and perform the first test on the PS hypothesis of path dependence. We investigate whether new products entering the provincial production baskets are non-randomly related to initial production baskets. We confirm the general tendency of path dependence, but highlight at the same time that a sizable share of ‘new products’ are an exception to this general pattern. These ‘random entries’ over the PS are particularly interesting for industrial policy since they represent radical deviations from the initial comparative advantage. In the final part of the paper, we investigate using parametric analysis the product and provincial characteristics that determine these deviations from the PS pattern.

March 20, 2017

# 17.07 The spatial evolution of the Italian motorcycle industry (1893-1993): Klepper’s heritage theory revisited

Andrea Morrison, Ron Boschma

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This paper investigates the spatial evolution of the Italian motor cycle industry during the period 1893-1993. We find support for both the heritage theory of Klepper and the agglomeration thesis of Marshall. Indeed, being a spinoff company or an experienced firm enhanced the survival rates, but we also found a positive effect of being located in the Motor Valley cluster in Emilia Romagna. Interestingly, this beneficial effect of a cluster could not be found outside the Emilia Romagna region. This might indicate the importance of a favourable local institutional environment, as propagated by the Emilian district literature.

# 17.06 Collective Learning in China’s Regional Economic Development

Filed under: 2017 — mattehartog @ 1:32 pm

Jian Gao, Bogang Jun, Alex “Sandy” Pentland, Tao Zhou, César A. Hidalgo

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Industrial development is the process by which economies learn how to produce new products and services. But how do economies learn? And who do they learn from? The literature on economic geography and economic development has emphasized two learning channels: inter-industry learning, which involves learning from related industries; and inter-regional learning, which involves learning from neighboring regions. Here we use 25 years of data describing the evolution of China’s economy between 1990 and 2015–a period when China multiplied its GDP per capita by a factor of ten–to explore how Chinese provinces diversified their economies. First, we show that the probability that a province will develop a new industry increases with the number of related industries that are already present in that province, a fact that is suggestive of inter-industry learning. Also, we show that the probability that a province will develop an industry increases with the number of neighboring provinces that are developed in that industry, a fact suggestive of inter-regional learning. Moreover, we find that the combination of these two channels exhibit diminishing returns, meaning that the contribution of either of these learning channels is redundant when the other one is present. Finally, we address endogeneity concerns by using the introduction of high-speed rail as an instrument to isolate the effects of inter-regional learning. Our differences-in-differences (DID) analysis reveals that the introduction of high speed-rail increased the industrial similarity of pairs of provinces connected by high-speed rail. Also, industries in provinces that were connected by rail increased their productivity when they were connected by rail to other provinces where that industry was already present. These findings suggest that inter-regional and inter-industry learning played a role in China’s great economic expansion.

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