Papers in Evolutionary Economic Geography

December 30, 2017

# 17.32 Why do firms collaborate with local universities?

Filed under: 2017 — Tags: , , , — mattehartog @ 11:01 am

Rune Dahl Fitjar, Martin Gjelsvik

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This paper examines why firms sometimes collaborate locally rather than with higher-quality universities at a distance. Existing research has mostly relied on the localised knowledge spillover, or LKS, model to explain this. This model holds that knowledge transfer across distance is costly, and collaborating locally reduces the risk of information loss when the knowledge is transferred. However, there are various other reasons that could also explain the pattern. If the local university can make a useful contribution, firms might choose to look no further. Firms may also see collaboration as a long-term investment, helping to build up research quality at the local university with the hope of benefiting in the future. Finally, firms may want to contribute to the local community. We extend the LKS model with these additional motivations and explore their validity using data from 23 semi-structured interviews of firms that collaborate intensively with lower-tier local universities.

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December 19, 2017

# 17.31 Labour mobility, skill-relatedness and plant survival over the industry life cycle: Evidence from new Dutch plants

Filed under: 2017 — Tags: , , , , — mattehartog @ 7:22 am

Ron Boschma, Riccardo Cappelli, Anet Weterings

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Labour mobility is often considered a crucial factor for regional development. However, labour mobility is not good per se for local firms. There is increasing evidence that labour recruited from skill-related industries has a positive effect on plant performance, in contrast to intra-industry labour recruits. However, little is known about which types of labour are recruited in different stages of the evolution of an industry, and whether that matters for plant performance. This paper attempts to fill these gaps in the literature using plant-level data for manufacturing and services industries in the Netherlands for the period 2001-2009. Our study focuses on the effects of different types of labour recruits on the survival of new plants. We show that the effects of labour recruits from the same industry and from skill-related and unrelated industries on plant survival vary between the life cycle stages of industries. We also find that inter-regional labour flows do not impact on plant survival.

# 17.30 The core in the periphery? The cluster organisation as the central node in the Apulian aerospace district

Giuseppe Calignano, Rune Dahl Fitjar, Dieter Franz Kogler

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Cluster policy is often ineffective in peripheral regions with weak institutions and significant barriers to knowledge production and exchange. Nonetheless, many peripheral regions have pursued such policies in recent years, an example being technology districts in Southern Italy. This paper examines one such district, the aerospace district in Apulia, where policy has focused on indirect support for networking through coordination. This has led to a substantial increase in knowledge exchange within the district, but also to a heavy dependence on the cluster organization itself as the key actor in the knowledge exchange network.

November 22, 2017

# 17.29 Does institutional quality matter for trade? Institutional conditions in a sectoral trade framework

Filed under: 2017 — Tags: , , , — mattehartog @ 4:06 pm

Inmaculada C. Álvarez, Javier Barbero, Andrés Rodríguez-Pose, José L. Zofío

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This article examines the extent to which national institutional quality affects bilateral sectoral trade flows, as well as whether the conditioning role of institutions for trade has been waxing or waning with time. Based on a new trade theory framework, we derive a sectoral gravity equation, including novel variables corresponding to the exporter’s labour competitiveness levels, along with importer’s price indices and sectoral incomes, and analyse industry specific bilateral trade flows of 186 countries for the period 1996-2012. We address potential endogeneity and econometric drawbacks by means of Poisson Pseudo-Maximum Likelihood estimation methods. The results indicate that both the institutional conditions at destination and the institutional distance between exporting and importing countries are relevant factors for bilateral trade. Moreover, the effect associated to institutional conditions at destination moderately increases over time. This is a robust outcome across economic sectors, with higher values for agriculture and raw materials than for manufacturing and services.

# 17.28 Local and Non-Local Knowledge Typologies: Technological Complexity in the Irish Knowledge Space

Adam Whittle

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It is now commonplace to assume that the production of economically valuable knowledge is central to modern theories of growth and regional development. At the same time, it is also well known that not all knowledge is equal, and that the spatial and temporal distribution of knowledge is highly uneven. Combing insights from Evolutionary Economic Geography (EEG) and Economic Complexity (EC) the primary aim of this paper is to investigate whether more complex knowledge is generated by local of non-local (foreign) firms. From this perspective, a series of recent contributions have highlighted the role of foreign firms in enacting structural transformation, but such an investigation has yet to account for the complexity of the knowledge produced. Exploiting information contained within a recently developed Irish patent database our measure of complexity uses a modified bipartite network to link the technologies produced within regions, to their country of origin i.e. local or non-local. Results indicate that the most complex technologies tend to be produced in a few diverse regions. For Ireland, our results indicate that the most complex technologies tend to be produced in a few diverse regions. In addition, we find that the majority of this complex knowledge is generated in technology classes where the share of foreign activity is greater than local firms. Lastly, we generate an entry model to compute the process of complex regional diversification. Here the focus is on how regions develop a comparative advantage in a technological domains more complex than those already present in that region. As such, we focus our attention only on those technologies with the highest complexity values, as these technologies are said to underpin the European Union’s Smart Specialisation thesis.

October 23, 2017

# 17.27 Regional diversification and green employment in US Metropolitan Areas

Filed under: 2017 — Tags: , , — mattehartog @ 6:08 pm

Nicolò Barbieri, Davide Consoli

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This paper analyses whether and to what extent regional diversification enables or thwarts green employment in US Metropolitan Areas (MAs) between 2006 and 2014. The recent debate on related and unrelated variety provides the conceptual frame for our study. The main findings are two. First, unrelated diversification is a positive and significant predictor of green employment growth. Second, this effect differs across occupational categories: while unrelated variety at industry level favours the growth of mid- to low-skill green jobs, unrelated variety at occupational level favours high- to mid-skill green jobs. Overall, local related diversification has very little impact.

September 24, 2017

# 17.26 Analyzing the impact of R&D policy on regional diversification

Filed under: 2017 — T.Broekel @ 6:34 pm

Tom Broekel and Lars Mewes

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Existing studies on regional diversification highlight the importance of local path dependencies and related competences. However, little attention has been paid to other factors potentially contributing to diversification processes. Foremost, this concerns the role of R&D policy. This study investigates the relation between R&D policy and regional technological diversification in German labor market regions from 1996 to 2010. We find no evidence for proactive R&D policies, as subsidized R&D projects do not promote regional technological diversification. In contrast, R&D subsidies’ allocation is rather risk-averse with subsidies being more likely allocated to already established technologies and those related to region’s technology portfolio.

September 23, 2017

# 17.25 Big or small cities? On city size and economic growth

Filed under: 2017 — Tags: , , — mattehartog @ 8:03 pm

Susanne A. Frick, Andrés Rodríguez-Pose

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Policy-makers and academics frequently emphasize a positive link between city size and economic growth. The empirical literature on the relationship, however, is scarce and uses rough indicators for the size for a country’s cities, while ignoring factors that are increasingly considered to shape the relationship. In this paper, we employ a panel of 113 countries between 1980 and 2010 to explore whether (1) there are certain city sizes that are growth enhancing and (2) how additional factors highlighted in the literature impact the city size/growth relationship. The results suggest a non-linear relationship which is dependent on the country’s size. In contrast to the prevailing view that large cities are growth-inducing, for the majority of countries relatively small cities of up to 3 million inhabitants are more conducive to economic growth. A large share of the urban population in cities with more than 10 million inhabitants is only growth promoting in countries with an urban population of 28.5 million and more. In addition, the relationship is highly context dependent: a high share of industries that benefit from agglomeration economies, a well-developed urban infrastructure, and an adequate level of governance effectiveness allow countries to take advantage of agglomeration benefits from larger cities.

# 17.24 Multinational enterprises, service outsourcing and regional structural change

Andrea Ascani, Simona Iammarino

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This paper offers a joint analysis of two phenomena characterizing most advanced economies in recent decades: the rise of foreign ownership in manufacturing activities and the pervasiveness of the service economy. The aim of the study is to examine the structural transformation of regional economic systems within the UK by focusing on the role played by foreign multinational enterprises (MNEs) in manufacturing in facilitating the development of services. From a conceptual perspective, this research relies on different strands of literature on the impact of foreign direct investment (FDI) on recipient economies, on outsourcing and regional structural transformation, and on the identification of local multipliers. The empirical analysis focuses on a specific demand-side channel for structural change: the forward linkage established by foreign manufacturing MNEs with local service providers through outsourcing. Descriptive evidence shows that service outsourcing by foreign plants operating in manufacturing is pervasive compared to outsourcing by their domestic counterparts. On this basic premise, we estimate the multiplicative effects that foreign manufacturing activity has on the creation of service jobs in local labour markets. In order to produce reliable estimates of a local multiplier, the methodology adopts an instrumental variable approach. Our findings suggest that foreign presence in manufacturing can be a catalyst of regional structural change by stimulating the generation of new jobs in the tertiary sector via demand linkages.

# 17.23 The visible hand of cluster policy makers: An analysis of Aerospace Valley (2006-2015) using a place-based network methodology

Filed under: 2017 — Tags: — mattehartog @ 8:01 pm

Delio Lucena Piquero, Jérôme Vicente

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The paper focuses on cluster policies with particular attention to the role of R&D collaborative incentives in the structuring of knowledge networks in clusters. We disentangle the main network failures in regional innovation systems, and discuss the selection procedures designed by policy makers to enhance the production of innovation outputs. We draw evidence from the French Aerospace Valley cluster from 2006 to 2015. The empirical analysis relies on a dataset of 248 granted research consortia, from which we build 4-cohorts knowledge networks enable us evidencing the evolving structural properties of the cluster over time. We suggest avoiding the bias and limitations of 1 and 2-mode network analysis by developing an original place- based network methodology that emphasizes on structural equivalence and groups behaviors. We discuss the results focusing on the convergence degree between the network statistical findings and the policy makers’ objectives. Finally, the methodology allows us identifying who are the agents of the structural and technological changes observed during the period.

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