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Increasing Returns, Input-Output Linkages, and Technological Leapfrogging

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Author Info
Fredrik Gallo (Lund University, Sweden)

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Abstract

Firms agglomerate in one region due to increasing returns, input-output linkages and transportation costs. In the de-industrialised region factor prices are lower and a new technology may be profitable to adopt in that region instead, inducing a change in the technological leadership. This paper shows that the risk of locking in to an old technology is monotonically increasing in the benefits of agglomeration. Greater incompatibility between technologies also increases the risk of rejecting potentially superior manufacturing processes.

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Publisher Info
Article provided by Berkeley Electronic Press in its journal Topics in Economic Analysis & Policy.

Volume (Year): 6 (2006)
Issue (Month): 1 ()
Pages: 1552-1552
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Handle: RePEc:bep:eaptop:v:6:y:2006:i:1:p:1552-1552

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Related research
Keywords: agglomeration lock-in new economic geography technological leapfrogging

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Find related papers by JEL classification:
F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies

References listed on IDEAS
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    Other versions:
  5. Amiti, M., 1998. "Regional Specialisation and Technological Leapfrogging," Papers 90-14, La Trobe - Department of Economics.
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    Other versions:
  8. Gianmarco I. P. Ottaviano & Diego Puga, 1998. "Agglomeration in the Global Economy: A Survey of the 'New Economic Geography'," The World Economy, Blackwell Publishing, vol. 21(6), pages 707-731, 08. [Downloadable!] (restricted)
    Other versions:
  9. Masahisa Fujita & Paul Krugman & Anthony J. Venables, 2001. "The Spatial Economy: Cities, Regions, and International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262561476, December.
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  11. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June. [Downloadable!] (restricted)
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  12. Brezis, Elise S & Krugman, Paul R, 1997. " Technology and the Life Cycle of Cities," Journal of Economic Growth, Springer, vol. 2(4), pages 369-83, December. [Downloadable!] (restricted)
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  13. Brezis, Elise S & Krugman, Paul R & Tsiddon, Daniel, 1993. "Leapfrogging in International Competition: A Theory of Cycles in National Technological Leadership," American Economic Review, American Economic Association, vol. 83(5), pages 1211-19, December. [Downloadable!] (restricted)
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