Papers in Evolutionary Economic Geography

The working paper series Papers in Evolutionary Economic Geography (PEEG) is an initiative of the Section of Economic Geography at Utrecht University. The goal of the series is to promote the use of evolutionary economics in the field of economic geography. We welcome submissions of both theoretical and empirical papers. Each paper will be reviewed by Ron Boschma and Koen Frenken on the basis of the following three criteria: (i) Meaningful combination of evolutionary economics and economic geography (see also PEEG #05.01), (ii) Quality of the paper, (iii) Originality of the paper. Please send your submission to: r.boschma@geo.uu.nl or k.frenken@geo.uu.nl.

PEEG is listed in the RePEc archive, click here

2009

2008

2007

2006

2005

2007
2008
#08.20	Frank Neffke, Martin Svensson Henning and Ron Boschma
	Surviving in Agglomerations: Plant Evolution and the Changing Benefits of the Local Environment

#08.19	Frank Neffke and Martin Svensson Henning
	Revealed Relatedness: Mapping Industry Space

#08.18	Frank Neffke
	Time-Varying Agglomeration Externalities in UK Counties between 1841 and 1971

#08.17	Ron Boschma and Koen Frenken
	Some Notes on Institutions in Evolutionary Economic Geography

#08.16	Max-Peter Menzel
	Dynamic Proximities – Changing Relations by Creating and Bridging Distances

#08.15	Jérôme Vicente, Pierre-Alexandre Balland and Olivier Brossard
	Getting Into Networks and Clusters: Evidence on the GNSS composite knowledge process in (and from) Midi-Pyrénées

#08.14	Dirk-Jan Koch and Ruerd Ruben
	Spatial Clustering Of NGOs: An Evolutionary Economic Geography Approach

#08.13	Niels Bosma, Erik Stam and Veronique Schutjens
	Creative Destruction and Regional Productivity Growth: Evidence from the Dutch Manufacturing and Services Industries

#08.12	Thomas Brenner and Dirk Fornahl
	Regional Path-Dependence in Start-up Activity

#08.11	Tom Broekel & Andreas Meder
	The Bright and Dark Side of Cooperation for Regional Innovation Performance

#08.10	Anne ter Wal
	Cluster Emergence and Network Evolution: A longitudinal analysis of the inventor network in Sophia-Antipolis

#08.09	Ron Boschma, Rikard Eriksson, Urban Lindgren
	Labour mobility, related variety and the performance of plants: A Swedish study

#08.08	Frank Neffke, Martin Svensson Henning, Ron Boschma, Karl-Johan Lundquist, Lars-Olof Olander
	Who Needs Agglomeration? Varying Agglomeration Externalities and the Industry Life Cycle

#08.07	Erik Stam
	Entrepreneurship and Innovation Policy

#08.06	Lucia Cusmano, Maria Luisa Mancasi, Andrea Morrison
	Innovation and the geographical and functional dimensions of outsourcing: An empirical investigation based on Italian firm level data
2007
#08.05	Renato Aristides Orozco Pereira
	World City Network Expansion 2000-2004; An appraisal of the determinants of connectivity growth among world cities

#08.04	Tom Broekel
	From Average to the Frontier: A Nonparametric Frontier Approach to the Analysis of Externalities and Regional Innovation Performance

#08.03	Rik Wenting, Oedzge Atzema, Koen Frenken
	Urban Amenities or Agglomeration Economies? Locational Behaviour and Entrepreneurial Success of Dutch Fashion Designers

#08.02	Ron Boschma, Simona Iammarino
	Related variety, trade variety and regional growth in Italy
2007
#08.01	Rik Wenting, Koen Frenken
	Firm Entry and Institutional Lock-in: An Organizational Ecology Analysis of the Global Fashion Design Industry

2007
#07.09	Bjørn Asheim, Ron Boschma, Philip Cooke
	Constructing regional advantage: Platform policies based on related variety and differentiated knowledge bases

#07.08	Alexander Cole
	Beyond the Knowledge-Based Theory of the Geographic Cluster

#07.07	Anne ter Wal, Ron Boschma
	Co-evolution of firms, industries and networks in space

#07.06	Otto Raspe, Frank van Oort
	What When Space Matters Little For Firm Productivity? A multilevel analysis of localised knowledge externalities

#07.05	Evert-Jan Visser, Oedzge Atzema
	Beyond clusters: Fostering innovation through a differentiated and combined network approach

#07.04	Johannes Gluckner
	Economic Geography and the Evolution of Networks

#07.03	Ron Martin, Peter Sunley
	Complexity Thinking and Evolutionary Economic Geography

#07.02	Jürgen Essletzbichler, David L. Rigby
	Exploring Evolutionary Economic Geographies

#07.01	Koen Frenken, Ron Boschma
	A theoretical framework for Evolutionary Economic Geography: Industrial dynamics and urban growth as a branching process

2006
2006
#06.11	Leo van Grunsven
	New Industries in Southeast Asia’s Late Industrialization: Evolution versus Creation - The Automation Industry in Penang (Malaysia) considered

#06.10	Kerstin Press
	Divide to conquer? The Silicon Valley - Boston 128 case revisited

#06.09	Lee Fleming, Koen Frenken
	The evolution of inventor networks in the Silicon Valley and Boston regions

#06.08	Koen Frenken, Gerben van der Steege
	The evolution of the Dutch dairy industry and the rise of cooperatives: Combining transaction cost and evolutionary approaches

#06.07	Otto Raspe, Frank van Oort
	The knowledge economy and urban economic growth

#06.06	Ron Martin, Peter Sunley
	Path dependence and regional economic evolution

#06.05	Veronique Schutjens, Erik Stam
	Starting anew: Entrepreneurial intentions and realizations subsequent to business closure

#06.04	Erik Stam
	A process model of locational change in entrepreneurial firms: An evolutionary perspective

#06.03	Ron A. Boschma, Jesse W. J. Weltevreden
	An evolutionary perspective on Internet adoption by retailers in the Netherlands

#06.02	Elisa Giuliani
	Networks and heterogeneous performance of cluster firms

#06.01	Ron A. Boschma, Anne L.J. ter Wal
	Knowledge networks and innovative performance in an industrial district. The case of a footwear district in the South of Italy

2005
2005
#05.13	Jürgen Essletzbichler
	Diversity, stability and regional growth in the U.S. (1975-2002)

#05.12	Luca Bertolini
	Evolutionary urban transportation planning? An exploration

#05.11	Olav Sorenson, Jan W. Rivkin, Lee Fleming
	Informational Complexity and the Flow of Knowledge across social boundaries

#05.10	Jesse W.J. Weltevreden, Oedzge A.L.C. Atzema, Koen Frenken, Karlijn de Kruijf, Frank G. van Oort
	The geography of Internet adoption by retailers

#05.09	Ron A. Boschma, Markku Sotarauta
	Economic policy from an evolutionary perspective: the case of Finland

#05.08	Frank G. van Oort, Erik Stam
	Agglomeration economies and entrepreneurship: testing for spatial externalities in the Dutch ICT industry

#05.07	Leo van Grunsven, Floor Smakman
	Industrial restructuring and early industry pathways in the Asian 1st generation NICs: The Singapore garment industry

#05.06	Ron A. Boschma, Anet B.R. Weterings
	The effect of regional differences on the performance of software firms in the Netherlands

#05.05	Claes Andersson, Koen Frenken, Alexander Hellervik
	A complex network approach to urban growth

#05.04	Ron A. Boschma, Rik Wenting
	The spatial evolution of the British automobile industry

#05.03	Ron A. Boschma, Jesse W.J. Weltevreden
	B2c e-commerce adoption in inner cities: An evolutionary perspective

#05.02	Koen Frenken, Frank G. van Oort, Thijs Verburg, Ron A. Boschma
	Variety and regional economic growth in the Netherlands

#05.01	Ron A. Boschma, Koen Frenken
	Why is economic geography not an evolutionary science? Towards an evolutionary economic geography

#05.01

#05.01 (PDF: 285 kb)

Ron A. Boschma, Koen Frenken

Why is economic geography not an evolutionary science? Towards an evolutionary economic geography

The paper explains the commonalities and differences between neoclassical, institutional and evolutionary approaches that have been influential in economic geography during the last couple of decades. For all three approaches, we argue that they are in agreement in some respects and in conflict in other respects. While explaining to what extent and in what ways the Evolutionary Economic Geography approach differs from the New Economic Geography and the Institutional Economic Geography, we can specify the value-added of economic geography as an evolutionary science. <Back to top>

#05.02

#05.02 (PDF: 1,093 kb)

Koen Frenken, Frank G. van Oort, Thijs Verburg, Ron A. Boschma

Variety and regional economic growth in the Netherlands

In economic theory, one can distinguish between variety as a source of regional knowledge spillovers, called Jacobs externalities, and variety as a portfolio protecting a region from external shocks. We argue that Jacobs externalities are best measured by related variety (within sectors), while the portfolio argument is better captured by unrelated variety (between sectors). We introduce a methodology based on entropy measures to compute related variety and unrelated variety. Using data at the COROP level for the period 1996-2002, we find that Jacobs externalities enhance employment growth, while unrelated variety dampens unemployment growth. Productivity growth, by contrast, can be explained by traditional determinants including investments and R&D expenditures. Implications for regional policy in The Netherlands follow. <Back to top>

#05.03

#05.03 (PDF: 292 kb)

Ron A. Boschma, Jesse W.J. Weltevreden

B2c e-commerce adoption in inner cities: An evolutionary perspective

Internet makes it possible for consumers to shop without visiting a physical store. As online shopping is becoming more popular, this could have significant impact on in-store shopping. The extent to which consumers, producers and retailers make use of the Internet as a complementary channel or as a substitute for in-store shopping is fundamental for the way traditional retailing will be affected. It is only recently that geographers are becoming interested in the spatial consequences of this new form of commerce. From a traditional geographical perspective, one could expect that business-to-consumer (b2c) e-commerce could make physical shopping redundant, leading to a ‘death of distance’. There are, however, several factors that may limit this new form of commerce, such as logistical constraints (e.g., personal delivery of goods may be quite expensive), habits of people, and the need for social contact. The main goal of the paper is to draw some expectations concerning the relationship between b2c e-commerce and inner city retailing. Using new insights based on evolutionary economics, hypotheses will be developed concerning the impact of b2c e-commerce on consumers’ shopping behaviour, retailers’ store strategy, and the inner city retailing environment as a whole. We claim that habits may act as a constraint to change consumers’ shopping behaviour. In addition, routines can explain why retailers may be rather reluctant in exploiting this new channel of commerce, and why they are most likely to adopt rather conservative e-commerce strategies. We also explain how and why inner cities, as important retailing and consumption places, may affect the way actors deal with this new form of commerce. One may expect that especially in these localities, both stimulating and limiting factors of b2c e-commerce adoption are predominant, depending on the quality or the attractiveness of the inner cities, among other things. <Back to top>

#05.04

#05.04 (PDF: 335 kb)

Ron A. Boschma, Rik Wenting

The spatial evolution of the British automobile industry

This paper aims to describe and explain the spatial evolution of the automobile sector in Great Britain from an evolutionary perspective. This analysis is based on a unique database of all entries and exits in this sector during the period 1895-1968, collected by the authors. Cox regressions show that spinoff dynamics, localization economies and time of entry have had a significant effect on the survival rate of automobile firms during the period 1895-1968. <Back to top>

#05.05

#05.05 (PDF: 438 kb)

Claes Andersson, Koen Frenken, Alexander Hellervik

A complex network approach to urban growth

The economic geography can be viewed as a large and growing network of interacting activities. This fundamental network structure and the large size of such systems makes complex networks an attractive model for its analysis. In this paper we propose the use of complex networks for geographical modeling and demonstrate how such an application can be combined with a cellular model to produce output that is consistent with large scale regularities such as power laws and fractality. Complex networks can provide a stringent framework for growth dynamic modeling where concepts from e.g. spatial interaction models and multiplicative growth models can be combined with the flexible representation of land and behavior found in cellular automata and agent-based models. In addition, there exists a large body of theory for the analysis of complex networks that have direct applications for urban geographic problems. The intended use of such models is twofold: i) to address the problem of how the empirically observed hierarchical structure of settlements can be explained as a stationary property of a stochastic evolutionary process rather than as equilibrium points in a dynamics, and, ii) to improve the prediction quality of applied urban modeling. <Back to top>

#05.06

#05.06 (PDF: 341 kb)

Ron A. Boschma, Anet B.R. Weterings

The effect of regional differences on the performance of software firms in the Netherlands

This paper aims to explore the effect of regional differences on the performance of software firms in the Netherlands. Inspired by evolutionary economics, we account for the impact of (1) co-location and sharing a local knowledge base; (2) pre-entry experience in the same or related industries; (3) being connected; and, (4) having organisational capabilities to cope with change. The outcomes of the regression analyses on data gathered among 265 software firms suggest that firms located in regions specialised in ICT have a higher innovative productivity. Spin-offs and firms with organisational capabilities also perform better, while network relationships do not affect the performance of software firms. <Back to top>

#05.07

#05.07 (PDF: 284 kb)

Leo van Grunsven, Floor Smakman

Industrial restructuring and early industry pathways in the Asian 1st generation NICs: The Singapore garment industry

This article aims to contribute to an understanding of the industrial dynamics/evolution of mature export production complexes in the first generation Asian NICs, employing an evolutionary economic perspective. Over the past decade and longer the first generation Asian NICs, Singapore included, have been confronted with imperatives necessitating deep restructuring. We observe that industrial decline, associated with failed restructuring caused by lock-in, does not fit these countries, its industrial regions and early industries. Yet research has hardly begun to look at adjustment and address deeper evolution from tenets in the framework of evolutionary economics although such an approach is made not less but rather more relevant by continued resilience. We analyse the pathway(s) of one early industry, i.c. the apparel industry, in Singapore, through the 1980s and 1990s. The withering away in the Singapore context of an industry such as apparel is not inevitable. From a juxtaposition of the line of thinking in evolutionary economics emphasizing hindrance and decline due to path dependency and lock-ins with an alternative line emphasizing the possibility to adjust through renewal and the limited operation of lock-ins, we argue why the latter rather than the former has been the case. <Back to top>

#05.08

#05.08 (PDF: 363 kb)

Frank G. van Oort, Erik Stam

Agglomeration economies and entrepreneurship: testing for spatial externalities in the Dutch ICT industry

Although there is growing evidence on the role of agglomeration economies in the formation and growth of firms, both the concepts of agglomeration economies and entrepreneurship tend to be ambiguously defined and measured in the literature. In this study, we aim to improve the conceptualisations and measures of agglomeration economies and entrepreneurship. Indicators of agglomeration economies are analysed in clearly defined urban regimes on three spatial scales in the Netherlands – national zoning, labour market connectedness, and urban size. This is done in order to uncover their effect on two entrepreneurial phases in the firm life cycle - new firm formation and the growth of incumbent firms in the relatively new ICT industry in the Netherlands. In comparison with new firm formation, the growth of incumbent firms is not so much related to spatial clustering of the ICT industry and other localized sources of knowledge economies associated with urban density. Instead, knowledge as an input for growth of incumbent firms is associated with more endogenous (firm internal) learning aspects, reflected by a significant correlate with R&D-investments. Also the effect of local ICT firm competition differs between the two types of firms: a positive effect on new firm formation, but a negative effect on incumbent firm growth. In general, agglomeration economies have stronger effects on the formation of ICT firms than on the growth of ICT firms. <Back to top>

#05.09

#05.09 (PDF: 451kb)

Ron A. Boschma, Markku Sotarauta

Economic policy from an evolutionary perspective: the case of Finland

In the last decade, the Finnish economy has shown an unprecedented recovery, after being hit by a deep crisis in the early 1990s. The paper views and interprets this successful transformation process based on ICT from an evolutionary perspective. Although the rapid pace of the restructuring of the Finnish economy suggests a break with the past, this remarkable recovery was firmly rooted in its economic history. In addition, Finnish public policy played its role in turning Finland into a knowledge economy. Although a master plan for the Finnish economy was lacking, many policies worked out quite well together over an extended period. Building on education, research and technology policy initiatives taken in the 1970s and 1980s, the deep economic crisis in the early 1990s paved the way for new policy directions, with a focus on network-facilitating innovation policies. <Back to top>

#05.10

#05.10 (PDF: 487kb)

Jesse W.J. Weltevreden, Oedzge A.L.C. Atzema, Koen Frenken, Karlijn de Kruijf, Frank G. van Oort

The Geography of Internet Adoption by Retailers

Up till now, the literature on Internet adoption by retailers paid little attention to spatial variables. Using data on 27,000 retail outlets in the Netherlands, we investigate the geographical diffusion of Internet adoption by Dutch retailers. More precise, we examine to what extent retail Internet adoption differs between shopping centers, cities, and regions, while controlling for product and organizational variables. Results of the linear and multinomial logistic regressions suggest that shops at city centers are more likely to adopt the Internet than shops located at shopping centers at the bottom of the retail hierarchy. Furthermore, shops in large cities have a higher probability to adopt the Internet than shops in small cities. On the regional level, the likelihood of Internet adoption is higher for shops in core regions than for retail outlets in the periphery. In conclusion, geography seems to matter for retail Internet adoption. <Back to top>

#05.11

#05.11 (PDF: 225kb)

Olav Sorenson, Jan W. Rivkin, Lee Fleming

Informational Complexity and the Flow of Knowledge across social boundaries

Scholars from a variety of backgrounds – economists, sociologists, strategists, and students of technology management – have sought a better understanding of why some knowledge disperses widely while other knowledge does not. In this quest, some researchers have focused on the characteristics of the knowledge itself (e.g., Polanyi, 1966; Reed and DeFillippi, 1990; Zander and Kogut, 1995) while others have emphasized the social networks that constrain and enable the flow of knowledge (e.g., Coleman et al., 1957; Davis and Greve, 1997). This chapter examines the interplay between these two factors. Specifically, we consider how the complexity of knowledge and the density of social relations jointly influence the movement of knowledge. Imagine a social network composed of patches of dense connections with sparse interstices between them. The dense patches might reflect firms, for instance, or geographic regions or technical communities. When does knowledge diffuse within these dense patches circumscribed by social boundaries but not beyond them? Synthesizing social network theory with a view of knowledge transfer as a search process, we argue that knowledge inequality across social boundaries should reach its peak when the underlying knowledge is of moderate complexity. To test this hypothesis, we analyze patent data and compare citation rates across three types of social boundaries: within versus outside the firm, geographically near to versus far from the inventor, and internal versus external to the technological class. In all three cases, the disparity in knowledge diffusion across these borders is greatest for knowledge of an intermediate level of complexity. <Back to top>

#05.12

#05.12 (PDF: 350kb)

Luca Bertolini

Evolutionary urban transportation planning? An exploration

For urban transportation planners these are challenging times. Mounting practical concerns are mirrored by more fundamental critiques. The latter come together in the observation that conventional approaches do not adequately account for the irreducible uncertainty of future developments. The central aim of this paper is to explore if and how an evolutionary approach can help overcome this limit. Two core-hypotheses are formulated. The first is that the urban transportation system behaves in an evolutionary fashion. The second hypothesis is that because of this, urban transportation planning needs also to focus on enhancing the resilience and adaptability of the system. Changes in transport and land use development patterns and policies and in the broader context in the post-war period in the Amsterdam region are analysed in order to illustrate the two core-hypotheses. In the conclusions more general implications are drawn. <Back to top>

#05.13

#05.13 (PDF: 414kb)

Jürgen Essletzbichler

Diversity, stability and regional growth in the U.S. (1975-2002)

This paper summarizes the theoretical arguments from evolutionary theory and ecological economics to put the trade-off between regional economic diversity and regional economic growth on stronger theoretical foundations. Hypotheses are tested using an empirical model that links regional economic diversity to stability and growth using data on 177 BEA areas of the continental United States during the period (1975-2002). <Back to top>

#06.01

#06.01 (PDF: 246kb)

Ron A. Boschma, Anne L.J. ter Wal

Knowledge networks and innovative performance in an industrial district. The case of a footwear district in the South of Italy

The traditional district literature tends to assume that: (1) the competitiveness of firms depends on external sources of knowledge; (2) all firms in a district benefit from knowledge externalities; (3) relying on external knowledge relationships necessarily means these are confined to the district area. Our case study of the Barletta footwear district in the South of Italy suggests otherwise. Based on social network analysis, we demonstrate that the local knowledge network is quite weak and unevenly distributed among the local firms. A strong local network position of a firm tended to increase their innovative performance, and so did their connectivity to extra-local firms. So, it mattered being connected either locally or non-locally: being co-located was surely not enough. Having a high absorptive capacity seemed to raise only indirectly, through non-local relationships, the innovative performance of firms. <Back to top>

#06.02 (PDF: 283kb)

Elisa Giuliani

Networks and heterogeneous performance of cluster firms

This paper explores the relationship existing among the heterogeneous nature of firms in industrial clusters, their structural position in knowledge networks and their performance. Following the rising interest for spatially agglomerated industrial firms and their learning and innovative potential the paper shows empirically that the performance of firms in clusters is related with firm-level knowledge endowments and their position in the knowledge network using firm-level data on three wine clusters. <Back to top>

#06.03 (PDF: 115kb)

Ron A. Boschma, Jesse W.J. Weltevreden

An evolutionary perspective on Internet adoption by retailers in the Netherlands

The paper analyses from an evolutionary perspective how retailers respond and adapt to b2c e-commerce. As such, the paper explores the diversity of behavior of retailers with respect to the adoption of e-commerce. More in particular, it examines empirically the extent to which the adoption of Internet strategies is affected by firm-specific features (e.g., habits of the entrepreneur, routines of firms), network relationships, and geographical proximity. Logistic regression analyses of 643 independent retailers in the Netherlands suggest that geography matters, controlling for other factors. That is, the probability of having an Internet strategy increases significantly when (a) the more knowledge spillovers are locally available; (b) the more demanding local customers are; and (c), the less rivalry is present locally. <Back to top>

#06.04 (PDF: 122kb)

Erik Stam

A process model of locational change in entrepreneurial firms: an evolutionary perspective

How do changes in the spatial organization of entrepreneurial firms come about? This paper provides a conceptualisation of the process of locational change. A process model of locational change is constructed on the basis of an empirical study of 109 locational events during the life course of 25 young firms in knowledge intensive sectors (knowledge services and biomedicals). This process model of locational change maps both internal and external variation and selection processes. This model contributes to the development of a causal process theory of the spatial development of (new) firms. <Back to top>

#06.05 (PDF: 158kb)

Veronique Schutjens, Erik Stam

Starting anew: Entrepreneurial intentions and realizations subsequent to business closure

We know that most businesses fail. But what is not known is to what extent failed ex-entrepreneurs set up in business again. The objective of this article is to explore potential and realized serial entrepreneurship. Based on three disciplines – psychology, labour economics, and the sociology of careers – we formulated propositions to explain (potential) serial entrepreneurship. We tested these propositions empirically with a longitudinal database of 79 businesses that had closed within 5 years after start-up. A large majority of the ex-entrepreneurs maintained entrepreneurial intentions subsequent to business closure, while almost one in four business closures were followed by a new business (serial entrepreneurship). Our results show that the determinants of restart intention (potential serial entrepreneurship) and actual restart realization (realized serial entrepreneurship) are different. Ex-entrepreneurs who are young, who worked full-time in their prior business, and who recall their business management experience positively are likely to harbour restart intentions. Only ‘being located in an urban region’ transpired to have a significant effect on the start of a new business. Although entrepreneurial intentions are a necessary condition for the start of a new business, this study shows that the explanation of entrepreneurial intentions is distinct from the explanation of new business formation subsequent to business closure.

#06.06 (PDF: 344kb)

Ron Martin, Peter Sunley

Path dependence and regional economic evolution

In recent years, economic geographers have seized on the concepts of ‘path dependence’ and ‘lock-in’ as key ingredients in constructing an evolutionary approach to their subject. However, they have tended in to invoke these notions without a proper examination of the ongoing discussion and debate devoted to them within evolutionary economics and elsewhere. Our aim in this paper, therefore, is, first, to highlight some of the unresolved issues surround these concepts, and, second, to explore their usefulness for understanding the regional economic evolution. We argue that in many important aspects, path dependence and lock-in are place-dependent processes, and as such require geographical explanation. At the same time, there has been little discussion of regional path creation: the assumption has been that new technological-economic paths emerge at random or spontaneously across space, an assumption that we find too simplistic. This leads on to the key question as to why some regional economies become locked into development paths that lose dynamism, whilst other regional economies seem able to avoid this danger and in effect are able ‘reinvent’ themselves through successive new paths or phases of development. We conclude that whilst path dependence is an important feature of the economic landscape, the concept requires further elaboration if it is to function as a core concept in an evolutionary economic geography. <Back to top>

#06.07 (PDF: 576kb)

Otto Raspe, Frank G. van Oort

The knowledge economy and urban economic growth

In this paper we contribute to the longstanding discussion on the role of knowledge to economic growth in a spatial context. We observe that in adopting the European policy strategy towards a competitive knowledge economy, The Netherlands is – as most European countries - mainly oriented towards industrial, technological factors. The policy focus is on R&D specialized regions in their spatial economic strategies. We place the knowledge economy in a broader perspective. Based on the knowledge economy literature, we value complementary indicators: the successful introduction of new products and services to the market (‘innovation’) and indicators of skills of employees (‘knowledge workers’). Using econometric analysis, we relate the three factors ‘R&D’, ‘innovation’ and ‘knowledge workers’ to regional economic growth. We conclude that the factors ‘innovation’ and ‘knowledge workers’ are more profoundly related to urban employment and productivity growth than the R&D-factor. Preferably, urban research and policymakers should therefore take all three knowledge factors into account when determining economic potentials of cities. <Back to top>

#06.08 (PDF: 130kb)

Koen Frenken, Gerben van der Steege

The evolution of the Dutch dairy industry and the rise of cooperatives: Combining transaction cost and evolutionary approaches

The thesis advanced in this paper holds that any transaction cost explanation of the diffusion of a particular organizational form requires an evolutionary analysis of differential performance of competing organizational forms over time. Using data on 1141 dairy factories in The Netherlands, we find evidence that cooperative factories performed significantly better than private factories, which can be explained by cooperatives’ lower transaction costs. However, superior performance is observed only in the Northern part, while cooperatives were more dominant in the Southern part. This suggests that entry conditions for cooperative factories in the South were more favourable than in the North. <Back to top>

#06.09 (PDF: 198kb)

Lee Fleming, Koen Frenken

The evolution of inventor networks in the Silicon Valley and Boston regions

While networks are widely thought to enhance regional innovative capability, there exist few longitudinal studies of their formation and evolution over time. Based on an analysis of all patenting inventors in the U.S. from 1975 to 2002, we observe dramatic aggregation of the regional inventor network in Silicon Valley around 1989. Based on network statistics, we argue that the sudden rise of giant networks in Silicon Valley can be understood as a phase transition during which small isolated networks form one giant component. By contrast, such a transition in Boston occurred much later and much less dramatically. We do not find convincing evidence that this marked difference between the two regions is due to regional differences in the propensity to collaborate or the involvement of universities in patenting. Interviews with key network players suggest that contingent labor mobility between established firms in Silicon Valley, in particular resulting from IBM’s policy as a central player in patenting activity, promoted inter-organizational networking, leading to larger inventor networks. <Back to top>

#06.10 (PDF: 187kb)

Kerstin Press

Divide to conquer? The Silicon Valley - Boston 128 case revisited

The present paper investigates the role of decentralisation for the adaptability of production networks in clusters. It develops a simulation model able to test to what extent decentralised, networked clusters with many small firms (Silicon Valley) can be more adjustable than those composed of fewer, large companies (Boston 128). The model finds that for limited degrees of product complexity, decentralisation increases cluster adaptability at the expense of greater instability. This increases the risk of firm failure. Moreover, it is shown that agent numbers matter greatly for the competitiveness of decentralised clusters. Only if they host more firms than integrated cluster types is their lead in performance maintained. As a result, an additional condition had to be met to allow the Silicon Valley type to outperform the Boston 128 one: Greater firm numbers and strong startup dynamics. <Back to top>

#06.11 (PDF: 317kb)

Leo van Grunsven

New Industries in Southeast Asia’s Late Industrialization: Evolution versus Creation - The Automation Industry in Penang (Malaysia) considered

Discourse on industry development and policy practice in late industrialization countries in East and Southeast Asia has predominantly tended to relate the emergence of new industries to ‘creation’ by the state and thereby to the role of state intervention or involvement in industrial growth and restructuring. On the other hand the role and position of (local) entrepreneurship in the genesis of new industries has been rather neglected, as little room was perceived for ‘autonomous’ development. Southeast Asian late industrialization is currently being confronted with the limits of development and expansion of specific (FDI-driven) export industries and thus with the necessity to devise new growth paths in industry (on the basis of high tech industries). This compels a reconsideration of policy practice and perceptions of modes of industry development on which it is based.

In this paper we argue that a state-orchestrated ‘creation’ of priority industries is not the only possible route to new high tech industries in Southeast Asian late industrialization. This emanates from an analysis - based on field research - of the emergence and development of a recent growth industry in Malaysia, i.e. the manufacturing of automated equipment (or, automation industry) and its constituent firms in the Penang region. The analysis demonstrates that the mode of development of this industry conforms rather well to a number of notions from evolutionary economics on firm genesis and development in new industries. This suggests that successful industrial policies can be based on supporting an evolutionary ‘birth and development’ path, i.e. industry genesis and evolution as a more or less autonomous incremental process of the development of firms and their capabilities.<Back to top>

#07.01 (PDF: 109kb)

Koen Frenken, Ron A. Boschma

A theoretical framework for Evolutionary Economic Geography: Industrial dynamics and urban growth as a branching process

We propose a framework that specifies the process of economic development as an evolutionary branching process of product innovations. Each product innovation provides a growth opportunity for an existing firm or a new firm, and for an existing city or a new city. One can then obtain both firm size and city size distributions as two aggregates resulting from a single evolutionary process. Gains from variety at the firm level (economies of scope) and the urban level (Jacobs externalities) provide the central feedback mechanism in economic development generating strong path dependencies in the spatial concentration of industries and the specialisation of cities. Gains from size are also expected, yet these are ultimately bounded by increasing wages. The contribution of our framework lies in providing a micro-foundation of economic geography in terms of the interplay between industrial dynamics and urban growth. The framework is sufficiently general to investigate systematically a number of stylised facts in economic geography, while at the same time it is sufficiently flexible to be extended such as to become applicable in more specific micro-contexts. A number of extensions related to the concepts of knowledge spillover and lock-in, are also discussed. <Back to top>

#07.02 (PDF: 342kb)

Jürgen Essletzbichler, David L. Rigby

Exploring Evolutionary Economic Geographies

Evolutionary approaches in economics have gathered increasing support over the last 25 years. Despite an impressive body of literature, economists are still far from formulating a coherent research paradigm. The multitude of approaches in evolutionary economics poses problems for the development of an evolutionary economic geography. For the most part, evolutionary economic geography imports selective concepts from evolutionary biology and economics and applies those concepts to specific problems within economic geography. We discuss a number of problems with this approach and suggest that a more powerful and appealing alternative requires the development of theoretically consistent models of evolutionary processes. This paper outlines the contours of an evolutionary model of economic dynamics where economic agents are located in different geographical spaces. We seek to show how competition between those agents, based on the core evolutionary principles of variety, selection and retention, may produce distinct economic regions sharing properties that differentiate them from competitors elsewhere. These arguments are extended to illustrate how the emergent properties of economic agents and places co-evolve and lead to different trajectories of economic development over space. <Back to top>

#07.03 (PDF: 276kb)

Ron Martin, Peter Sunley

Complexity Thinking and Evolutionary Economic Geography

#07.04 (PDF: 986kb)

Johannes Gluckler

Economic Geography and the Evolution of Networks

An evolutionary perspective on economic geography requires a dynamic understanding of change in networks. This paper explores theories of network evolution for their use in geography and develops the conceptual framework of geographical network trajectories. It specifically assesses how tie selection constitutes the evolutionary process of retention and variation in network structure and how geography affects these mechanisms. Finally, a typology of regional network formations is used to discuss opportunities for innovation in and across regions. <Back to top>

#07.05 (PDF: 129kb)

Evert-Jan Visser, Oedzge Atzema

Beyond clusters: Fostering innovation through a differentiated and combined network approach

Over the past decades, economic and innovation policy across Europe moved in the direction of creating regional clusters of related firms and institutions. Creating clusters through public policy is risky, complex and costly, however. Moreover, it is not necessary to rely on clusters to stimulate innovation. A differentiated and combined network approach to enhancing innovation and stimulating economic growth may be more efficient and effective, especially though not exclusively in regions lacking clusters. The challenge of such a policy is to mitigate the bottlenecks associated with ‘global pipeline’, ‘local buzz’ and ‘stand alone’ strategies used by innovative firms (cf. Bathelt et al. 2004; Atzema & Visser 2005b), and to combine these strategies with a view to their complementarity in terms of knowledge effects. Private and semi-public brokers will be key in the evolving policy, as timely organizational change is crucial for continued innovation, while brokers also need to mitigate governance problems. This requires region-specific knowledge in terms of sectors, life cycles, institutional and socio-cultural factors, and yields spatially differentiated and differentiating adjustment strategies. The role of public policy is to assist in recruiting, provide start-up funding and monitor brokers. With this, policy moves towards a decentralized, process-based, region-specific, spatially diverging and multi-level system of innovation that is geared towards the evolving innovation strategies of firms. <Back to top>

#07.06 (PDF: 393kb)

Otto Raspe, Frank G. van Oort

What When Space Matters Little For Firm Productivity? A multilevel analysis of localised knowledge externalities

This paper contributes to the debate on localized knowledge externalities as potential source for firm productivity gains. We apply multilevel analysis to link firm productivity (and growth) to knowledge intensive spatial contexts in the Netherlands. If localized knowledge externalities are important, then firms are hypothesised to co-locate in order to capitalize on each other's knowledge stocks. We conceptualise the regional knowledge base by three dimensions: local 'research and development' intensity, local 'innovativeness', and the characterization of locations by a ‘knowledge workers’ dimension (based on ICT use, educational level, communicative and creative skills). Controlling for firm's heterogeneity, we find a relatively small spatial effect: regional characteristics contribute for only a few percents to firm productivity. The regional intensity of 'innovation' most significantly contributes to this effect. We do not find a contextual spatial effect for productivity growth. These results suggest that the territorial dimension of knowledge externalities should not be exaggerated. <Back to top>

#07.07 (PDF: 128kb)

Anne L.J. ter Wal, Ron A. Boschma

Co-evolution of firms, industries and networks in space

The cluster literature suffers from a number of shortcomings: (1) by and large, cluster studies do not take into account that firms in a cluster are heterogeneous in terms of capabilities; (2) cluster studies tend to overemphasize the importance of place and geographical proximity and underestimate the role of networks which are, by definition, a-spatial entities; (3) most, if not all cluster studies have a static nature, and do not address questions like the origins and evolution of clusters. Our aim is to overcome these shortcomings and propose a theoretical framework on the evolution of clusters. Bringing together bodies of literature on clusters, industrial dynamics, the evolutionary theory of the firm and network theory, we describe how clusters co-evolve with: (1) the industry they adhere to; (2) the (dynamic) capabilities of the firms they contain; and (3) the industry-wide knowledge network they are part of. Based on this framework, we believe the analysis of cluster evolution provides a promising research agenda in evolutionary economic geography for the years to come. <Back to top>

#07.08 (PDF: 204kb)

Alexander Cole

Beyond the Knowledge-Based Theory of the Geographic Cluster

The knowledge-based theory of the geographic cluster represents a major attempt to re-conceptualize clusters, in essence arguing that the localization of firms in similar and related industries stimulates learning and innovation, giving a competitive advantage to clustered firms. This paper critically examines the knowledge-based theory the cluster, arguing that it has greatly overstated the advantages of co-location to firms and misidentified the mechanisms through which learning occurs in clusters. In particular, the theory is criticized on three points: the flexible, under-specified way that it defines its object of study; the focus on firms as an explanatory variable instead of more fundamental processes of resource accumulation; and the functionalist mode of theory that employs as an explanation. Ways to address of each of these issues are discussed. In a final section I suggest that the rather static notions of learning put forward in the knowledge-based theory of the cluster be replaced by a developmental theory of regional dynamics that focuses on both learning and structural transformation. <Back to top>

#07.09 (PDF: 136kb)

Bjørn Asheim, Ron A. Boschma, Philip Cooke

Constructing regional advantage: Platform policies based on related variety and differentiated knowledge bases

The article presents a regional innovation policy model, based on the idea of constructing regional advantage. This policy model brings together concepts like related variety, knowledge bases and policy platforms. Related variety attaches great importance to knowledge spillovers across complementary sectors, possibly in a region. Then, the paper categorises knowledge into ‘analytical’ (science based), ‘synthetic’ (engineering based) and ‘symbolic’ (artistic based) in nature, with different ‘virtual’ and real proximity mixes. Finally, the implications of this are traced for evolving ‘platform policies’ that facilitate economic development within and between regions in action lines appropriate to related variety and differentiated knowledge bases. <Back to top>

#08.01 (PDF: 163kb)

Rik Wenting, Koen Frenken

Firm Entry and Institutional Lock-in: An Organizational Ecology Analysis of the Global Fashion Design Industry

Few industries are more concentrated than the global fashion industry. We analyse the geography and evolution of the ready-to-wear fashion design industry by looking at the yearly entry rates following an organizational ecology approach. In contrast to earlier studies on manufacturing industries, we find that legitimation effects are local and competition effects are global. This result points to the rapid turnover of ideas in fashion on the one hand and the global demand for fashion apparel on the other hand. We attribute the decline of Paris in the post-war period to 'institutional lock-in', which prevented a ready-to-wear cluster to emerge as vested interested of haute couture designers were threatened. An extended organizational ecology model provides empirical support for this claim.<Back to top>

#08.02 (PDF: 145kb)

Ron A. Boschma, Simona Iammarino

Related variety, trade variety and regional growth in Italy

This paper makes an attempt to estimate the impact of regional variety and trade linkages on regional economic growth by means of export and import data by Italian province (NUTS 3) and sector (3-digit) for the period 1995-2003. Our results show strong evidence of related variety contributing to regional economic growth, no matter how growth is defined. Thus, Italian regions well endowed with sectors that are complementary in terms of competences (i.e. having related variety) perform better. The paper also assesses the effects of the breadth and relatedness of international trade linkages on regional growth, as it may bring new and related variety in the region. Our analysis demonstrates that regional growth is not affected by being well connected to the outside world per se, or having a high variety of knowledge flowing into the region. When the extra-regional knowledge originated from sectors the region is already specialised in, it did not positively impact on regional economic growth either. We found, however, some evidence of related extra-regional knowledge sparking off inter-sectoral learning across regions. With respect to employment growth, we could demonstrate that a region benefits from extra-regional knowledge when it originates from sectors that are related, but not similar to the sectors present in the region. Apparently, when the cognitive proximity between the extra-regional knowledge and the knowledge base of the region is neither too small nor too large, real learning opportunities are present, and the external knowledge contributes to regional employment growth. <Back to top>

#08.03 (PDF: 187kb)

Rik Wenting, Oedzge Atzema, Koen Frenken

Urban Amenities or Agglomeration Economies? Locational Behaviour and Entrepreneurial Success of Dutch Fashion Designers

Urban economic growth and industrial clustering is traditionally explained by Marshallian agglomeration economies benefiting co-located firms. The focus on firms rather than people has been challenged by Florida arguing that urban amenities and a tolerant climate attract creative people, and the firms they work for, to certain cities. We analyse to what extent these two mechanisms affect the locational behaviour of Dutch fashion designers. On the basis of a questionnaire, we find that urban amenities are considered more important than agglomeration economies in entrepreneurs’ location decision. Designers located in the Amsterdam cluster do not profit from agglomeration economies as such, but rather from superior networking opportunities with peers both within and outside the cluster. <Back to top>

#08.04 (PDF: 1,6MB)

Tom Broekel

From Average to the Frontier: A Nonparametric Frontier Approach to the Analysis of Externalities and Regional Innovation Performance

Although a rich literature has emerged analyzing the impact of localization, urbanization, and Jacobs externalities on regional innovativeness, the findings are still contradictory. Traditional studies differ mainly in the employed data but rely on similar empirical approaches. This paper argues in favor of using in this context production frontier approaches instead of the commonly employed production function approaches. In addition, a nonparametric frontier approach is used to empirically examine the influence of the externalities on regions’ innovativeness. For four different industries positive effect of localization and urbanization externalities are found. In contrast, with the exception of the transport equipment industry, Jacobs externalities seem to be of minor importance.

#08.05 (PDF: 149kb)

Renato Aristides Orozco Pereira

World City Network Expansion 2000-2004. An appraisal of the determinants of connectivity growth among world cities

The term “globalization” has long been vented indiscriminately everywhere with few being capable to either define or measure it. Cities are said to be at the forefront of the “works of globalization” by becoming coordinating centers for the transnational activities of multinational corporations. Ultimately, they become tied up to each other, as those activities require information inputs from different regions of the world. The article uses the advanced corporate service firms’ location patterns to measure the linkages between cities. As social, economical, cultural and political information about the cities flow through the firms’ network of branch offices, a highly connected city provides better corporate servicing to businessman wanting to do business elsewhere. By calculating the total connectivity of each city to the rest of the world, as well as total presence of global service firms within these cities, in the years 2000 and 2004, we produce a measure of the connectivity growth in the period. In a second moment, we use a linear regression model to test hypothesis concerning the determinants of connectivity growth in those cities. Results show us that connectivity growth in a city, in case of firm’s network expansion, display a “rich-get-rich” behavior on which well connected cities became even more connected. Furthermore, connectivity growth is responsive to competition, agglomeration economies, infrastructure, trade openness, human capital and the overall economic level of the country. Some of the variables behave differently according to the service firms’ sector being analyzed. In particular, we scrutinize the role of human capital as a determinant of connectivity growth in the management and banking sector, and interpret the results as a function of whether the sector is skilled-labor intensive (management) or capital intensive (banking)..

#08.06 (PDF: 133kb)

Lucia Cusmano, Maria Luisa Mancasi & Andrea Morrison

Innovation and the geographical and functional dimensions of outsourcing: An empirical investigation based on Italian firm level data

The paper investigates the diversified patterns of outsourcing in the Lombardy region and relates them to the probability of introducing product and process innovation. Based on a large firm-level survey, we show that outsourcing processes are strongly regionally embedded and that offshoring is still a limited phenomenon. Outsourcing strategies are shown to have a positive impact on firms’ innovation. In particular, the outsourcing of service activities contributes the most to innovation, thus suggesting that firms successfully pursue core strengthening strategies. Our econometric estimates show that both geographical and organizational proximity matter. Indeed, the positive association of services with innovation is strongly related to their regional dimension, which points toward the importance of local user-producer relationships. When outsourcing crosses national borders, keeping the outsourced activities at least loosely connected to the firm appears critical, as offshoring to non affiliated firms has a clear negative impact on innovation.

#08.07 (PDF: 287kb)

Erik Stam

Entrepreneurship and Innovation Policy

What is meant by entrepreneurship, innovation and economic growth is often not clear or very idiosyncratic. This paper starts with a discussion of the nature of entrepreneurship and its relation to innovation. The second section provides an overview of theory and empirical research on the relation between entrepreneurship, innovation and economic growth. The paper continues with a study on entrepreneurship and innovation in the Netherlands in an international and historical perspective. After these conceptual, theoretical and empirical investigations, we turn to policy issues.

#08.08 (PDF: 722kb)

Frank Neffke, Martin Svensson Henning, Ron A. Boschma, Karl-Johan Lundquist & Lars-Olof Olander

Who Needs Agglomeration? Varying Agglomeration Externalities and the Industry Life Cycle

In this paper, the changing roles of agglomeration externalities during different stages of the industry life cycle are investigated. A central argument is that agglomeration externalities vary with mode of competition, innovation intensity, and characteristics of learning opportunities in industries. Following the Industry Life Cycle perspective, we distinguish between young and mature industries, and investigate how these benefit from MAR, Jacobs’ and Urbanization externalities. The empirical analysis builds on a Swedish plant level dataset that covers the period of 1974-2004.The outcomes of panel data regression models show that the benefits industries derive from their local environment are strongly associated with their stage in the industry life cycle. Whereas MAR externalities increase with the maturity of industries, Jacobs’ externalities decline when industries are more mature. This is in line with the hypothesis that young industries operate in an environment dominated by rapid product innovation and low levels of standardization. Hence, it pays off when knowledge can be sourced locally from many different sources, but there is still little scope for specialization benefits. Mature industries, in contrast, are associated with lower innovation intensities and a focus on cost saving process innovations. Therefore, there are major benefits to be derived from specialization, whereas knowledge spillovers from different industries are less relevant. The distinction between the product competition in young industries and price competition in mature industries is reflected in our finding that high regional factor costs are detrimental to mature industries, but not to young industries. This can also be related to the finding that high quality living environments, attractive for highly paid employees, are important to young industries. Overall, the outcomes stress that industrial life cycles have to be taken into account in the analysis of agglomeration externalities.

#08.09 (PDF: 134kb)

Ron A. Boschma, Rikard Eriksson & Urban Lindgren

Labour mobility, related variety and the performance of plants: A Swedish study

This paper analyses the impact of skill portfolios and labour mobility on plant performance by means of a unique database that connects attributes of individuals to features of plants for the whole Swedish economy. We found that a portfolio of related competences at the plant level increases significantly productivity growth of plants, in contrast to plant portfolios consisting of either similar or unrelated competences. Based on the analysis of 101,093 job moves, we found that inflows of skills that are related to the existing knowledge base of the plant had a positive effect on plant performance, while the inflow of new employees with skills that are already present in the plant had a negative impact. Our analyses show that inflows of unrelated skills only contribute positively to plant performance when these are recruited in the same region. Labour mobility across regions only has a positive effect on productivity growth of plants when this concerns new employees with related skills.

#08.10 (PDF: 300kb)

Anne L.J. ter Wal

Cluster Emergence and Network Evolution: A longitudinal analysis of the inventor network in Sophia-Antipolis

A widely held view in cluster research is that clusters are characterized by the presence of networks of local collective learning. However, with a growing number of studies indicating this is not necessarily the case, the question arises under which conditions clusters exhibit dense networks of local collective learning. Taking a longitudinal view at the high-tech cluster of Sophia-Antipolis this paper investigates whether and how networks of collective learning among inventors emerged throughout the growth of the cluster from the late 1970s onwards. On the basis of EPO and USPTO patent data we reconstructed co-inventorship networks for the cluster’s two main industries. Detecting a network of local collective learning only in Information Technology, in which growth has been increasingly based on spin-offs and start-ups, and not in Life Sciences, we suggest that the extent and nature of the local concentration of firms over time strongly affect the evolution of local collective learning networks.

#08.11 (PDF: 1154kb)

Tom Broekel, Andreas Meder

The Bright and Dark Side of Cooperation for Regional Innovation Performance

Studies analyzing the importance of intra- and inter-regional cooperation for regional innovation performance are mainly of qualitative nature and focus strongly on the positive effects that high levels of cooperation can yield. For the case of the German labor market regions and the Electrics & Electronics industry the paper provides a quantitative-empirical analysis taking into account the possibility of negative effects related to regional lock-in, lock-out, and cooperation overload situations. Using conditional nonparametric frontier techniques and cooperation behavior measures we find positive as well as substantial negative effects of cooperation with the latter being induced by excessive and unbalanced cooperation behavior.

#08.12 (PDF: 180kb)

Thomas Brenner, Dirk Fornahl

Regional Path-Dependence in Start-up Activity

This paper studies the impact of an existing industrial structure in a region on the number of start-ups in this region. The aim is to detect path-dependencies in the regional industry structure. To this end we study empirically the regional factors that influence start-up rates. The approach deviates from the huge literature on start-up rates by studying each 2-digit industry separately, including the employment in other industries into the analysis and distinguishing between factors that provide founders and factors that influence their likelihood to start a firm.

#08.13 (PDF: 318kb)

Niels Bosma, Erik Stam, Veronique Schutjens

Creative Destruction and Regional Productivity Growth: Evidence from the Dutch Manufacturing and Services Industries

Do processes of firm entry and exit improve the competitiveness of regions? If so, is this a universal mechanism or is it contingent on the type of industry or region in which creative destruction takes place? This paper analyses the effect of firm entry and exit on the competitiveness of regions, measured by Total Factor Productivity (TFP) growth. Based on a study across 40 regions in the Netherlands over the period 1988-2002, we find that firm entry is related to productivity growth in services, but not in manufacturing. The positive impact found in services does not necessarily imply that new firms are more efficient than incumbent firms; high degrees of creative destruction may also improve the efficiency of incumbent firms. We also find that the impact of firm dynamics on regional productivity in services is higher in regions exhibiting diverse but related economic activities.

#08.14 (PDF: 239kb)

Dirk-Jan Koch, Ruerd Ruben

Spatial Clustering Of NGOs: An Evolutionary Economic Geography Approach

Strong patterns of concentration characterize the location decisions of development NGOs. Since current theories on non-profit location choice tend to neglect such tendencies, this article develops an evolutionary economic geography approach to non-profit organizations. It focuses on increasing returns to scale, labor mobility and path dependence and contextualizes those factors. A survey involving visual ranking methods of OECD-based development NGOs and structured field-level interviews with local NGOs in the Central African Republic and Tanzania provide original empirical data. Statistical methods are used to contrast the divergent experiences in the two countries. The article concludes that the increased interest of international NGOs in Tanzania and their continued lack of interest in the Central African Republic are self-perpetuating processes that explain the concentration of NGOs. This concentration may lead to increased efficiency, but reduces the equitable distribution of NGO aid and therefore has implications for the attainment of global poverty goals.

#08.15 (PDF: 379kb)

Jérôme Vicente, Pierre-Alexandre Balland & Olivier Brossard

Getting Into Networks and Clusters: Evidence on the GNSS composite knowledge process in (and from) Midi-Pyrénées

This paper aims to contribute to the empirical identification of clusters by proposing methodological issues based on network analysis. We start with the detection of a composite knowledge process rather than a territorial one stricto sensu. Such a consideration allows us to avoid the overestimation of the role played by geographical proximity between agents, and grasp its ambivalence in knowledge relations. Networks and clusters correspond to the complex aggregation process of bi or n-lateral relations in which agents can play heterogeneous structural roles. Their empirical reconstitution requires thus to gather located relational data, whereas their structural properties analysis requires to compute a set of indexes developed in the field of the social network analysis. Our theoretical considerations are tested in the technological field of GNSS (Global Satellite Navigation Systems). We propose a sample of knowledge relations based on collaborative R&D projects and discuss how this sample is shaped and why we can assume its representativeness. The network we obtain allows us to show how the composite knowledge process gives rise to a structure with a peculiar combination of local and distant relations. Descriptive statistics and structural properties show the influence or the centrality of certain agents in the aggregate structure, and permit to discuss the complementarities between their heterogeneous knowledge profiles. Quantitative results are completed and confirmed by an interpretative discussion based on a run of semi-structured interviews. Concluding remarks provide theoretical feedbacks.

#08.16 (PDF: 164kb)

Max-Peter Menzel

Dynamic Proximities – Changing Relations by Creating and Bridging Distances

The analysis of qualitative regional change requires an approach that is able to cope with these changes from a relational perspective. While the proximity concept explains the spatiality of relations at a particular point in time and describes them in terms of proximity and distance, a dynamic proximity concept must explain how these distances are both bridged and created. Three different dynamics are elaborated: a cognitive dynamic that changes through learning, a network dynamic that changes when connections are made and a spatial dynamic that changes whenever actors move in space. Proximity dimensions are constructed using these three dynamics. It is argued that bridging distances is the crucial process in changing relations and that bridging distance in one dimension requires proximities in other dimensions. Implications for regional development are derived.

#08.17 (PDF: 71kb)

Ron A. Boschma, Koen Frenken

Some Notes on Institutions in Evolutionary Economic Geography

Within the evolutionary economic geography framework the role of institutions deserves more explicit attention. We argue that territorial institutions are to be viewed as orthogonal to organisational routines in that each territory is characterised by a variety of routines, and in that a single firm can apply its routines in different territorial contexts. It is therefore meaningful to distinguish between institutional economic geography and evolutionary economic geography as their explanans is different. Yet, the two approaches can be combined in a dynamic framework in which institutions co-evolve with organisational routines, particularly in emerging industries. Furthermore, integrating the evolutionary and institutional approach allows one to analyse the spatial diffusion of organisational routines that mediate conflicts between social groups, in particular, those between capitalists and labourers. An evolutionary economic geography advocates an empirical research program, both qualitative and quantitative, in which the relative importance of organisational routines and territorial institutions for regional development can be addressed.

#08.18 (PDF: 324kb)

Frank Neffke

Time-Varying Agglomeration Externalities in UK Counties between 1841 and 1971

Using dynamic panel data methods on UK counties (1841-1971), we investigate long-term employment dynamics in seven distinct local industries. We study how industries benefit from specialised environments (MAR), diverse local economies (Jacobs’) and large local markets (urbanization), and, in contrast to most other authors, test if the strength of MAR, Jacobs’ and urbanization externalities changes over time. We find declining MAR and rising Jacobs’ externalities since the mid-nineteenth century, questioning the adequacy of a static framework when studying agglomeration externalities.

#08.19 (PDF: 391kb)

Frank Neffke, Martin Svensson Henning

Revealed Relatedness: Mapping Industry Space

In this paper we measure technological relatedness between industries using a dataset on product portfolios of plants. For this purpose we first develop a general methodology to extract data on co-occurrences of classes (e.g. industries) in a single entity (e.g. a plant) to construct estimates of the relatedness between the classes. The core assumption, in line with the concept of economies of scope, is that if two products are produced in the same plant, this is an indication of relatedness between the industries the two products are a part of. Unlike earlier methods, we arrive at a Revealed Relatedness (RR) index that can be interpreted on a ratio scale, allows for the use of indirect (i.e. not directly observed) information on industry relatedness, and conceptualizes relatedness as being asymmetric or directed. Direction of relatedness provides information on, for example, the most likely direction of spillovers between two classes. We also graph the RR matrices using methods borrowed from social network analysis. The result is a visualization of the “industry space” and how that changes over time with structural transformation of the economy. In order to test the validity of the framework, the industry space is used to plot structural transformation paths of regions. It is shown that the RR matrix indeed has significant explanatory power for the composition and change of a regions portfolio of manufacturing industries, in spite of the fact that regional information played no role in its derivation. This confirms the quality of our RR estimates.

#08.20 (PDF: 409kb)

Frank Neffke, Martin Svensson Henning, Ron A. Boschma

Surviving in Agglomerations: Plant Evolution and the Changing Benefits of the Local Environment

Cities vary with regard to the characteristics of their economic life. A formal model by Duranton and Puga (2001) suggests a division of labour between diversified and specialized cities. Diversified cities (the “nursery cities”) provide a fertile environment for search and innovation. Specialized cities, by contrast, are better equipped to facilitate mass-production. In essence, this spurs firms to re-locate as they mature from the exploratory set-up stage to mass-production. In this article, we empirically test the assumptions behind this model by means of survival analysis using Swedish plant level data of over 11 000 plants. More specifically, we investigate the effects of local specialization and local diversity on plant survival at different ages of a plant and for different size categories of plants. Not all types of local diversity will be of value to a plant. Rather, we expect plants to benefit especially from local diversity in related industries. In a similar vein, cities with a large concentration of a broad range of activities in related trades may confer larger benefits than cities with a narrow specialization in the plant’s own industry. To quantify the degree of relatedness between industries, we use a new measure, Revealed Relatedness. This serves to identify technological relatedness by measuring economies of scope as implied by the structure of production portfolios of plants. The findings suggest that regional characteristics strongly influence the chances of a plant to survive. In general, the hypothesized specialization effects are only found when we look at related specialization. Large plants at high stages of maturity form the only exception to this. However, diversity effects are only visible when we take all local diversity into account, not just diversity in related industries. Moreover, it is only young firms that benefit from regional diversity. This indicates that the “nursery city” metaphor holds as much for small, prototype plants as for large mass-production plants.

#09.01 (PDF: 171kb)

Zhigao Liu

Bringing History into Evolutionary Economic Geography for a Better Understanding of Evolution

The paper tries to construct the historical methodology for evolutionary economic geography. I elevate history to the methodological foundation of evolutionary economic geography, on which concrete research methods should be based. I explore how to evolution in economic geography by placing history in historical time and historical contexts. Accordingly, the concepts of path creation and path dependence should be used together in historical study. More important, the concept of path interdependence, which stresses the importance of the circumstances under which different processes and events are likely to occur, opens a new window on the temporal aspects of the world.

#09.02 (PDF: 210kb)

Francesco Quatraro

Knowledge Coherence, Variety and Productivity Growth: Manufacturing Evidence from Italian Regions

This paper analyzes the effects of the evolution of knowledge base in the manufacturing sectors on regional productivity growth. Knowledge is viewed as a heterogeneous asset, and an evolutionary perspective is adopted. The results of the empirical estimations corroborate the hypothesis that beyond the traditional measure of knowledge stock, knowledge coherence and variety matter in shaping productivity dynamics. The check for spatial dependence suggests that cross-regional externalities exert additional triggering effects on productivity growth, without debasing the effects of knowledge. Important policy implications stem from the analysis, in that regional innovation strategies should be carefully coordinated so as to reach a higher degree of internal coherence and exert positive effects on productivity.

#09.03 (PDF: 2.4mb)

Roderik Ponds and Frank van Oort and Koen Frenken

Innovation, spillovers, and university-industry collaboration: An extended knowledge production function approach

This paper analyses the effect of knowledge spillovers from academic research on regional innovation. Spillovers are localized to the extent that the underlying mechanisms are geographically bounded. However, university-industry collaboration - as one of the carriers of knowledge spillovers - is not limited to the regional scale. Consequently, we expect spillovers to take place over longer distances. The effect of university-industry collaboration networks on knowledge spillovers is modelled using an extended knowledge production function framework applied to regions in the Netherlands. We find that the impact of academic research on regional innovation is mediated not only by geographical proximity but also by social networks stemming from collaboration networks.

#09.04 (PDF: 536kb)

Thomas Brenner and Tom Broekel

Methodological Issues in Measuring Innovation Performance of Spatial Units

Measuring the innovation performance of regions or nations has been repeatedly done in the literature. What is missing in the literature is a discussion of what innovation performance of a region means. How do regions or nations contribute really to the innovation output of ﬁrms? And how can this contribution be investigated in an empirically sound way? We argue that while the literature offers many suggestions, their theoretical foundation is often weak and the underlying assumptions are rarely discussed. In this paper, we systematize various mechanisms by which spatial units inﬂuence ﬁrms’ innovation activities. On the basis of this, common innovation performance measures and analyses are discussed and evaluated. It is concluded that there is no general best way of measuring the innovation performance of spatial units. In fact, the most interesting insights can be obtained using a multitude of different approaches at the same time.

#09.05 (PDF: 236kb)

Ron Boschma and Koen Frenken

The Spatial Evolution of Innovation Networks: A Proximity Perspective

We propose an evolutionary perspective on the geography of network formation that is grounded in a dynamic proximity framework. In doing so, we root the proximity concept in an evolutionary approach to the geography of innovation networks. We discuss three topics. The first topic focuses on explaining the structure of networks. The second topic concentrates on explaining the effects of networks on the performance of actors. The third topic deals with the changing role of proximity dimensions in the formation and performance of innovation networks in the longer run.

#09.06 (PDF: 500kb)

Stefania Vitali and Mauro Napoletano and Giorgio Fagiolo

Spatial Localization in Manufacturing: A Cross-Country Analysis

This paper employs a homogenous ﬁrms database to investigate industry localization in European countries. More speciﬁcally, we compare, across industries and countries, the predictions of two of the most popular localization indices, i.e., the Ellison and Glaeser index (Ellison and Glaeser, 1997) and the Duranton and Overman index (Duranton and Overman, 2005). We ﬁnd that, independently from the index used, localization is a pervasive phenomenon in all countries studied, but the degree of localization is very uneven across industries in each country. Furthermore, we ﬁnd that the two indices signiﬁcantly diverge in predicting the intensity of the forces generating localization within each industry. Finally, we perform a cross-sectoral analysis of localized industries. We show that, in all countries, localized sectors are mainly “traditional” sectors (like jewelery, wine, and textiles) and sectors where scale economies are important. However, once one controls for countries’ industrial structures science-based sectors turn out to be the most localized ones.

Utrecht University

Urban & Regional research centre Utrecht

Section of Economic Geography

Staff

Research