Papers in Evolutionary Economic Geography

September 8, 2015

# 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.

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June 1, 2015

# 15.17 On firms’ product space evolution: the role of firm and local product relatedness

Filed under: 2015 — Tags: , , — mattehartog @ 12:06 pm

Alessia Lo Turco and Daniela Maggioni

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We explore the role of firm and local product-specific capabilities in fostering the introduction of new products in the Turkish manufacturing. Firms’ product space evolution is characterised by strong cognitive path dependence which, however, is relaxed by firm heterogeneity in terms of size, efficiency and international exposure. The introduction of new products in laggard Eastern regions, which is importantly related to the evolution of their industrial output, is mainly affected by firm internal product specific resources. On the contrary, product innovations in Western advanced regions hinge relatively more on the availability of suitable local competencies.

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