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Productivity Growth and Pecuniary Knowledge Externalities: An Empirical Analysis of Agglomeration Economies in European Regions

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Author Info

  • Cristiano Antonelli
  • Pier Paolo Patrucco
  • Francesco Quatraro

Abstract

The article investigates the effects of the agglomeration of technological activities on the growth in regional productivity, applying the notion of pecuniary knowledge externalities. Pecuniary knowledge externalities enable one to appreciate both the gains and losses associated with the regional concentration of knowledge-generating activities. Both are two sides of the same coin. The gains are due to the reduction in the prices of knowledge as input into its dedicated markets, while the losses stem from the reduction in the prices of knowledge as an output. This analysis allows us to contextualize the effect of geographic proximity on knowledge externalities and their impact on regional growth. Our analysis leads to the hypothesis of an inverted U‐shaped relationship between the agglomeration of innovation activities and productivity growth. The empirical analysis based on a large sample of European regions from 1996 to 2003 supports the hypothesis that agglomeration yields diminishing net positive effects beyond a maximum.

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File URL: http://hdl.handle.net/10.1111/j.1944-8287.2010.01104.x
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Bibliographic Info

Article provided by Clark University in its journal Economic Geography.

Volume (Year): 87 (2011)
Issue (Month): 1 (January)
Pages: 23-50

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Handle: RePEc:bla:ecgeog:v:87:y:2011:i:1:p:23-50

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Related research

Keywords: geographic agglomeration ; knowledge transactions ; pecuniary knowledge externalities ; patents ; total factor productivity ;

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References

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Citations

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Cited by:
  1. Costantini, Valeria & Mazzanti, Massimiliano & Montini, Anna, 2013. "Environmental performance, innovation and spillovers. Evidence from a regional NAMEA," Ecological Economics, Elsevier, vol. 89(C), pages 101-114.
  2. Cristiano Antonelli & Gianluigi Ferraris, 2011. "Innovation as an Emerging System Property: An Agent Based Simulation Model," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 14(2), pages 1.
  3. Corradini, Massimiliano & Costantini, Valeria & Mancinelli, Susanna & Mazzanti, Massimiliano, 2014. "Unveiling the dynamic relation between R&D and emission abatement," Ecological Economics, Elsevier, vol. 102(C), pages 48-59.
  4. Massimiliano Mazzanti & Valeria Costantini & Susanna Mancinelli & Massimilano Corradini, 2011. "Environmental and Innovation Performance in a Dynamic Impure Public Good Framework," Working Papers 201117, University of Ferrara, Department of Economics.
  5. E. Marrocu & S. Usai & R. Paci, 2013. "Networks, proximities and inter-firm knowledge exchanges," Working Paper CRENoS 201311, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
  6. Antonelli Cristiano & Ferraris Gianluigi, 2012. "Endogenous knowledge externalities: an agent based simulation model where schumpeter meets Marshall," Department of Economics and Statistics Cognetti de Martiis LEI & BRICK - Laboratory of Economics of Innovation "Franco Momigliano", Bureau of Research in Innovation, Complexity and Knowledge, Collegio 201202, University of Turin.
  7. Alessandra Colombelli & Francesco Quatraro, 2013. "New Firm Formation and the properties of local knowledge bases: Evidence from Italian NUTS 3 regions," Working Papers hal-00858989, HAL.

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