Specialization and Regional Economic Development
AbstractDebates 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.
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Bibliographic InfoPaper provided by Spatial Economics Research Centre, LSE in its series SERC Discussion Papers with number 0121.
Date of creation: Dec 2012
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Specialization; diversification; agglomeration economies; urban wages;
Find related papers by 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, Technological Change, and Growth - - Development Planning and Policy - - - Planning Models; Planning Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-12-15 (All new papers)
- NEP-GEO-2012-12-15 (Economic Geography)
- NEP-URE-2012-12-15 (Urban & Real Estate Economics)
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