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On the Marshall - Jacobs Controversy It takes two to tango

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  • Gerben van der Panne
  • Cees van Beers
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    Abstract

    The literature is inconclusive as to whether Marshallian specialization or Jacobian diversification externalities favour regional innovativeness. The specialization argument poses that regional specialization towards a particular industry improves innovativeness in that industry. Regional specialization allows for knowledge to spill over among similar firms. By contrast, the diversification thesis asserts that knowledge spills over between firms in different industries, causing diversified production structures to be more innovative. Building on an original database, we address this controversy for the Netherlands. We thereby advance on the literature by providing a two-level approach, at the region’s and the firm’s level. At the regional level, we compare specialized with diversified regions on numbers of accommodated innovators. At the firm level, we establish causalities between externalities and degree of innovativeness. The results suggest Marshallian externalities: specialized regions accommodate increased numbers of innovating firms and, consistently, incumbent firms’ innovativeness increase with regional specialization. Once the product has been launched, innovators in diversified Jacobian regions prove more successful in commercial terms than innovators in specialized Marshallian regions.

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    Bibliographic Info

    Paper provided by DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies in its series DRUID Working Papers with number 06-23.

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    Date of creation: 2006
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    Handle: RePEc:aal:abbswp:06-23

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    Web page: http://www.druid.dk/

    Related research

    Keywords: Industrial clusters; innovation; knowledge externalities;

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    Cited by:
    1. Otto, Anne & Fornahl, Dirk, 2008. "Long-term growth determinants of young businesses in Germany : effects of regional concentration and specialisation," IAB Discussion Paper 200813, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    2. Cees Beers & Gerben Panne, 2011. "Geography, knowledge spillovers and small firms’ exports: an empirical examination for The Netherlands," Small Business Economics, Springer, Springer, vol. 37(3), pages 325-339, October.
    3. Lucia Cusmano & Andrea Morrison & Enrico Pandolfo, 2014. "Spinoff and Clustering: a return to the Marshallian district," Papers in Evolutionary Economic Geography (PEEG), Utrecht University, Section of Economic Geography 1416, Utrecht University, Section of Economic Geography, revised Jul 2014.
    4. Anne Otto & Dirk Fornahl, 2009. "Cohesion Policy:Methodology And Indicators Towards Common Approach," Romanian Journal of Regional Science, Romanian Regional Science Association, Romanian Regional Science Association, vol. 3(1), pages 1-35, JUNE.
    5. Antonelli, Cristiano, 2008. "Pecuniary Externalities: the Convergence of Directed Technological Change and the Emergence of Innovation Systems," 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 200807, University of Turin.
    6. Baltzopoulos, Apostolos, 2009. "The Firm and the Region as Breeding Grounds for Entrepreneurs," Working Paper Series in Economics and Institutions of Innovation, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies 189, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    7. Matthias Bürger, 2011. "Dynamics of Collaborative Invention Tracking Growth of Cooperative and Total Patents in the Region," Jena Economic Research Papers 2011-045, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
    8. Frank Van Oort, 2013. "Agglomeration Economics Beyond the Specialisation-Diversity Controversy," Papers in Evolutionary Economic Geography (PEEG), Utrecht University, Section of Economic Geography 1313, Utrecht University, Section of Economic Geography, revised Aug 2013.
    9. Baltzopoulos, Apostolos, 2009. "Agglomeration Externalities and Entrepreneurship - micro-level evidence from Sweden," Working Paper Series in Economics and Institutions of Innovation, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies 190, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    10. Benner, Maximilian, 2013. "From smart specialisation to smart experimentation: Towards a new theoretical framework for EU regional policy," MPRA Paper 51843, University Library of Munich, Germany.

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