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Specialization and Regional Economic Development

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  • Thomas Kemeny
  • Michael Storper

Abstract

Debates about urban growth and change often center on specialization.However, arguments linking specialization to metropolitan economic development contain diverse, and sometimes conflicting, claims. Is it better to be highly specialized or diversified? Does specialization refer to the absolute scale of an activity in a region, its share within the regional economy, or its share in the nation's economy? Does specialization have static effects, or is its impact chiefly evolutionary? This paper starts by investigating these different theoretical claims. We then turn to an empirical inquiry into the roles of relative and absolute specialization. By analyzing local agglomerations over time, we find that growing absolute specialization is positively linked to wages, while changes in relative concentration are not significantly associated with wage dynamics. This supports notions of specialization based on the absolute size of an agglomeration, and casts doubt on notions of specialization based on shares of an activity in the regional economy.

Suggested Citation

  • Thomas Kemeny & Michael Storper, 2012. "Specialization and Regional Economic Development," SERC Discussion Papers 0121, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:sercdp:0121
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    2. Nicola Cortinovis & Frank Oort, 2015. "Variety, economic growth and knowledge intensity of European regions: a spatial panel analysis," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 55(1), pages 7-32, October.
    3. Nicole Adler & Georg Hirte & Shravana Kumar & Hans-Martin Niemeier, 2022. "The impact of specialization, ownership, competition and regulation on efficiency: a case study of Indian seaports," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 24(3), pages 507-536, September.
    4. An, Qian & Gordon, Peter & Moore II, James, 2014. "A note on commuting times and city size: Testing variances as well as means," The Journal of Transport and Land Use, Center for Transportation Studies, University of Minnesota, vol. 7(2), pages 105-110.
    5. Martin Andersson & Johan P Larsson & Joakim Lundblad, 2015. "The Productive City Needs both - localization and urbanization economies across spatial scales in the city," ERSA conference papers ersa15p385, European Regional Science Association.
    6. María Delgado Gómez-Flors & Maite Alguacil, 2018. "The Impact of Immigrant Diversity on Wages. The Spanish Experience," Sustainability, MDPI, vol. 10(9), pages 1-29, September.

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    More about this item

    Keywords

    Specialization; diversification; agglomeration economies; urban wages;
    All these keywords.

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • O21 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Planning Models; Planning Policy

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