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The effects of economic integration on regional growth, an evolutionary model

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Author Info

  • Cani�ls, M.C.J.

    (ECIS, Technical University of Eindhoven)

  • Verspagen, B.

    (ECIS, Technical University of Eindhoven)

Abstract

This paper will present a multi-region-multi-country model in which inter-regional knowledgespillovers determine the growth of regions. Key parameters in the model are the learningcapability of a region, and the exogenous rate of knowledge generation (R&D). The intensityof spillovers depends on geographical distance between regions. The model is investigated bymeans of simulation techniques. What results is a core-periphery situation, the exact form ofwhich depends on the assumed spatial structure. One surprising result of the analysis is thatlarger technological differences between regions may lead to smaller disparity in terms of thelong-run spatial distribution of GDP per capita.The impact of economic integration is investigated by comparing two different aspects ofthe model. First, examining a fixed exchange rate system versus a system of flexible exchangerates results in conditions (constellations of parameters) under which fixed exchange rates(compared to flexible exchange rates) generate less disparity across regions. However,depending on the parameter values, fixed exchange rates may also generate more disparity,leading to the conclusion that the effect of monetary integration is ambiguous.Second, the impact of barriers to knowledge spillovers is analysed by assuming that crossborder knowledge flows are hampered compared to inter-country flows. This results in theobservation that reduced cross border flows have a large impact when regions are initiallyunequal with respect to their exogenous rate of knowledge generation or their learningcapability. In these cases, the resulting trends in overall disparity are quite different from thetrends established in a situation of no barriers to knowledge spillovers.

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Bibliographic Info

Paper provided by Eindhoven Center for Innovation Studies (ECIS) in its series Eindhoven Center for Innovation Studies (ECIS) working paper series with number 99.13.

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Date of creation: 1999
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Handle: RePEc:dgr:tuecis:9913

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Web page: http://ecis.ieis.tue.nl/

For corrections or technical questions regarding this item, or to correct its listing, contact: (Carolina Castaldi).

Related research

Keywords: economic integration; economic growth; evolutionary economics; regional growth;

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References

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Jan Fagerberg & Bart Verspagen & Marjolein Caniëls, 1997. "Technology, Growth and Unemployment across European Regions," Regional Studies, Taylor and Francis Journals, vol. 31(5), pages 457-466.
  2. Michele Cincera, 1997. "Patents, R&D and technological spillovers at the firm level: some evidence from econometric count models for panel data," ULB Institutional Repository 2013/851, ULB -- Universite Libre de Bruxelles.
  3. Robert J. Barro & Xavier Sala-i-Martin, 1991. "Convergence across States and Regions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(1), pages 107-182.
  4. ten Raa, Thijs & Wolff, Edward N., 2000. "Engines of growth in the US economy," Structural Change and Economic Dynamics, Elsevier, vol. 11(4), pages 473-489, December.
  5. Jerry A. Hausman & Bronwyn H. Hall & Zvi Griliches, 1984. "Econometric Models for Count Data with an Application to the Patents-R&D Relationship," NBER Technical Working Papers 0017, National Bureau of Economic Research, Inc.
  6. Verspagen, Bart, 1991. "A new empirical approach to catching up or falling behind," Open Access publications from Maastricht University urn:nbn:nl:ui:27-18004, Maastricht University.
  7. Crepon, Bruno & Duguet, Emmanuel, 1997. "Estimating the Innovation Function from Patent Numbers: GMM on Count Panel Data," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 12(3), pages 243-63, May-June.
  8. Flam, Harry, 1992. "Product Markets and 1992: Full Integration, Large Gains?," Journal of Economic Perspectives, American Economic Association, vol. 6(4), pages 7-30, Fall.
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  11. Silverberg, Gerald & Lehnert, Doris, 1993. "Long waves and 'evolutionary chaos' in a simple Schumpeterian model of embodied technical change," Structural Change and Economic Dynamics, Elsevier, vol. 4(1), pages 9-37, June.
  12. Kleinknecht, Alfred, 1990. "Are There Schumpeterian Waves of Innovations?," Cambridge Journal of Economics, Oxford University Press, vol. 14(1), pages 81-92, March.
  13. Malerba, Franco & Orsenigo, Luigi, 1995. "Schumpeterian Patterns of Innovation," Cambridge Journal of Economics, Oxford University Press, vol. 19(1), pages 47-65, February.
  14. Grossman, G.M. & Helpman, E., 1989. "Trade; Innovation; And Growth," Papers 154, Princeton, Woodrow Wilson School - Public and International Affairs.
  15. J. Bradford De Long, . "Productivity Growth, Convergence, and Welfare: Comment," J. Bradford De Long's Working Papers _129, University of California at Berkeley, Economics Department.
  16. Crepon, Bruno & Duguet, Emmanuel, 1997. "Research and development, competition and innovation pseudo-maximum likelihood and simulated maximum likelihood methods applied to count data models with heterogeneity," Journal of Econometrics, Elsevier, vol. 79(2), pages 355-378, August.
  17. Robert J. Gordon, 2000. "Does the "New Economy" Measure up to the Great Inventions of the Past?," NBER Working Papers 7833, National Bureau of Economic Research, Inc.
  18. Fagerberg, Jan, 1994. "Technology and International Differences in Growth Rates," Journal of Economic Literature, American Economic Association, vol. 32(3), pages 1147-75, September.
  19. Jaffe, A.B. & Trajtenberg, M., 1992. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," Papers 14-92, Tel Aviv.
  20. Freeman, C., 1991. "Networks of innovators: A synthesis of research issues," Research Policy, Elsevier, vol. 20(5), pages 499-514, October.
  21. Baumol, William J, 1986. "Productivity Growth, Convergence, and Welfare: What the Long-run Data Show," American Economic Review, American Economic Association, vol. 76(5), pages 1072-85, December.
  22. Barro, Robert J & Sala-i-Martin, Xavier, 1992. "Convergence," Journal of Political Economy, University of Chicago Press, vol. 100(2), pages 223-51, April.
  23. Solomou, Solomos, 1986. "Innovation Clusters and Kondratieff Long Waves in Economic Growth," Cambridge Journal of Economics, Oxford University Press, vol. 10(2), pages 101-12, June.
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Citations

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Cited by:
  1. Verspagen, B. & Schoenmakers, W., 2000. "The spatial dimension of knowledge spillovers in Europe: evidence from firm patenting data," Eindhoven Center for Innovation Studies (ECIS) working paper series 00.07, Eindhoven Center for Innovation Studies (ECIS).
  2. Verspagen, B., 2000. "Growth and structural change: trends, patterns and policy options," Eindhoven Center for Innovation Studies (ECIS) working paper series 00.08, Eindhoven Center for Innovation Studies (ECIS).
  3. Arijit Mukherjee & Enrico Pennings, 2004. "Imitation, patent protection, and welfare," Oxford Economic Papers, Oxford University Press, vol. 56(4), pages 715-733, October.
  4. Marsili, O., 2000. "Technological regimes and sources of entrepreneurship," Eindhoven Center for Innovation Studies (ECIS) working paper series 00.10, Eindhoven Center for Innovation Studies (ECIS).
  5. Aken, van J.E., 2001. "Management research based on the paradigm of the design sciences: the quest for tested and grounded technological rules," Eindhoven Center for Innovation Studies (ECIS) working paper series 01.11, Eindhoven Center for Innovation Studies (ECIS).
  6. Lint, O. & Pennings, E., 2000. "The recently chosen digital video standard: playing the game within the game," Eindhoven Center for Innovation Studies (ECIS) working paper series 00.02, Eindhoven Center for Innovation Studies (ECIS).
  7. Aken, van J., 2001. "Improving the relevance of management research By developing tested and grounded technologiCAL RULES," Eindhoven Center for Innovation Studies (ECIS) working paper series 01.19, Eindhoven Center for Innovation Studies (ECIS).

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