Papers in Evolutionary Economic Geography

April 23, 2018

# 18.18 On the evolution of comparative advantage: path-dependent versus path-defying changes

Filed under: 2018 — Tags: , , , — T.Broekel @ 7:13 am

Nicola D. Coniglio & Davide Vurchio & Nicola Cantore & Michele Clara

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Abstract: The diversification of production and trade is considered almost unanimously a fundamental policy goal, particularly for developing economies whose export baskets are heavily concentrated on a few products. In what direction trade diversification ought to take place is, however, subject to fierce debate. The Product Space (PS) framework (Hausmann and Klinger, 2007; Hidalgo et al. 2007) is a recent contribution in the economic literature that has proved very influential in policy circles. It argues that the endowment of production capabilities (technologies, production factors, institutions etc.) determines what countries produce today but it also constrains what they can produce in the future as it is uncommon that countries develop a comparative advantage in goods that do not draw from the same pool of capabilities (unrelated products). Contributions along such line argue that defying the initial comparative advantage can be a risky policy decision with high probability of failure. The main objective of this contribution is to use a novel methodology to investigate whether the patterns of diversification of a sample of 177 countries over the period 1995-2015 conform or not to the prediction of the PS framework. We find evidence of a high degree of path-dependence but our analysis suggests also that a significant number of new products that entered countries’ export baskets were unrelated to the initial productive specialization (path-defying changes). We shed light on the determinants of these ‘radical’ patterns of diversification and show they are associated with higher economic growth. The results of this study have important policy implications in particular for the design of industrial policies aimed at actively shaping countries’ structural transformation.

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July 15, 2015

# 15.20 Regional Industrial Evolution in China: Path Dependence or Path Creation?

Canfei He, Yan Yan and David Rigby

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The evolutionary economic geography indicates that regional industrial development is path dependent. The path dependence approach however ignores the external factors, which may create new paths of regional development. Moreover, it does not pay much attention to the role of institutions. Both external factors and institutions are crucial to understand the regional industrial evolution in China. Based on firm level data of Chinese manufacturing industries during 1998-2008, this study examined the industrial evolution through the lens of entry and exit of four digit industries at the Chinese prefectures. Using a measure of co-occurrence based technological relatedness, we apply a logit model to link industry entry and exit to technological relatedness. We find significant evidence that regions branch into new industries which are technologically related to the existing industries and related industries are less likely to exit. Related globalization also encourages the entry of new related industries and discourages the exit of related industries. Further analysis reveals that economic transition has created favorable conditions to allow a larger role of technological relatedness. New industries are more likely to enter regions which are globalized, liberalized and fiscally independent, indicating that economic transition has also generated opportunities for Chinese regions to create new paths of industrial development.

June 1, 2015

# 15.18 Evolutionary Economic Geography

Ron Boschma and Koen Frenken

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The chapter gives a brief overview of the most recent literature on Evolutionary Economic Geography (EEG). We describe how EEG has provided new and additional insights on a number of topics that belong to the core of the economic geography discipline: why do industries concentrate in space, how do clusters operate and evolve, how are innovation networks structured in space and how do they evolve over time, what types of agglomeration externalities induce urban and regional growth, how do regions diversify, and how do institutions and institutional change matter for the development of new growth paths in regions.

May 1, 2013

# 13.06 Creative industries from an evolutionary perspective: A critical literature review

Su-Hyun Berg and Robert Hassink

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Although creative industries have been popular as a research topic among social scientists from various backgrounds, most studies lack an evolutionary, history informed perspective. Since we regard this as an important deficit, we explore whether the notions of evolutionary economic geography can contribute to analyzing and explaining the spatial dynamics of creative industries, which has not been done yet in a systematic way. We conclude that it is particularly co-evolution that could potentially be an important notion to explain the spatial dynamics of creative industries in a comparative perspective.

October 8, 2012

# 12.19 Path dependence research in regional economic development: Cacophony or knowledge accumulation?

Filed under: 2012 — Tags: , , , — mattehartog @ 8:43 am

Martin Henning, Erik Stam, Rik Wenting

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The concept of path dependence has gained momentum in the social sciences, particularly in economic geography. In this paper, we explore the empirical literature on path dependence and path creation in regional economic development. We offer a critical reflection on these studies and outline commonalities and problems in research designs and empirical testing. Our review suggests that the popularity of the concept of path dependence in regional studies has led to a cacophony of studies rather than a purposeful accumulation of knowledge around the concept. To remedy this situation, we identify gaps and suggest guidelines for future empirical research on the role of path creation and path dependence in uneven regional development.

June 5, 2012

# 12.10 The path- and place-dependent nature of scientific knowledge production in biotech 1986-2008

Gaston Heimeriks and Ron Boschma

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This study explores the worldwide spatial evolution of scientific knowledge production in biotechnology in the period 1986-2008. We employ new methodology that identifies new key topics in biotech on the basis of frequent use of title worlds in major biotech journals as an indication of new cognitive developments within this scientific field. Our analyses show that biotech is subject to a path- and place-dependent process of knowledge production. We observed a high degree of re-occurrences of similar key topics in biotech in consecutive years. Furthermore, slow growth cities in biotech are characterized by topics that are less technologically related to other topics, while high growth cities in biotech contribute to topics that are more related to the entire set of existing topics. Slow growth and stable growth cities in biotech introduced more new topics, while fast growth cities in biotech introduced more promising topics. Slow growth cities also showed low levels of research collaboration, as compared to stable and high growth cities.

April 8, 2010

#10.05 Seeds of regional structural change. The role of entrepreneurs and expanding firms in shaping local path dependencies

Filed under: 2010 — Tags: , , , , — T.Broekel @ 12:51 pm

Frank Neffke, Matté Hartog, Ron Boschma and Martin Henning

PDF (This is the updated 2014 version of the paper)

Who introduces structural change in regional economies: Entrepreneurs or existing firms? And do local or non-local firms and entrepreneurs create most novelty in a region? Using matched employer-employee data for the whole Swedish workforce, we determine how unrelated and therefore how novel the activities of different establishments are to a region’s industry mix. Up- and downsizing establishments cause large shifts in the local industry structure, but these shifts only occasionally require an expansion of local capabilities because the new activities are often related to existing local activities. Indeed, these incumbents tend to align their production with the local economy, deepening the region’s specialization. In contrast, structural change mostly originates via new establishments, especially those with non-local roots. Moreover, although entrepreneurs start businesses more often in activities unrelated to the existing regional economy, new establishments founded by existing firms survive in such activities more often, inducing longer-lasting changes in the region.

September 20, 2009

#09.10 Rethinking Regional Path Dependence: Beyond Lock-in to Evolution

Filed under: 2009 — Tags: , , , , , — T.Broekel @ 9:14 am

Ron Martin

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This paper argues that in its ‘canonical’ form, the path dependence model, with its core concept of ‘lock-in, affords a very restrictive and narrowly applicable account of regional and local industrial evolution, an account moreover that is tied to problematic underpinnings based on equilibrist thinking. As such the canonical path dependence model actually stresses continuity rather than change. The paper goes on to explore recent developments in historical sociology and political science, where there are active attempts to rethink the application of path dependence to the evolution of institutions so as to emphasise change rather than continuity. These developments are used to argue for a rethinking of path dependence ideas in economic geography.

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