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Agglomeration, Innovation and Regional Development: Theoretical Perspectives and Meta-Analysis

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  • Henri L.F. de Groot

    ()
    (Vrije Universiteit Amsterdam)

  • Jacques Poot

    ()
    (University of Waikato, Hamilton, NZ)

  • Martijn J. Smit

    ()
    (Vrije Universiteit Amsterdam)

Abstract

Innovation and technological change are central to the quest for regional development. In the globally-connected knowledge-driven economy, the relevance of agglomeration forces that rely on proximity continues to increase, paradoxically despite declining real costs of information, communication and transportation. Globally, the proportion of the population living in cities continues to grow and sprawling cities remain the engines of regional economic transformation. The growth of cities results from a complex chain that starts with scale, density and geography, which then combines with industrial structure characterised by its extent of specialisation, competition and diversity, to yield innovation and productivity growth that encourages employment expansion, and further urban growth through inward migration. This paper revisits the central part of this virtuous circle, namely the Marshall-Arrow-Romer externalities (specialisation), Jacobs externalities (diversity) and Porter externalities (competition) that have provided alternative explanations for innovation and urban growth. The paper evaluates the statistical robustness of evidence for such externalities presented in 31 scientific articles, all building on the seminal work of Glaeser et al. (1992). These articles yield 393 estimates of those externalities, which are characterized by their sign and statistical significance. We aim to explain variation in estimation results using study characteristics by means of ordered probit analysis. The evidence in the literature on the role of the specific externalities is rather mixed, although for each type of externality we can identify how various aspects of primary study design, such as the adopted proxy for growth, the data used, and the choice of covariates influence the outcomes.

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Bibliographic Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 07-079/3.

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Date of creation: 10 Oct 2007
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Handle: RePEc:dgr:uvatin:20070079

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Web page: http://www.tinbergen.nl

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Keywords: innovation; regional development; agglomeration; urban externalities; meta-analysis;

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References

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  7. Raymond J.G.M. Florax & Henri L.F. de Groot & Ruud A. de Mooij, 2002. "Meta-analysis: A Tool for Upgrading Inputs of Macroeconomic Policy Models," Tinbergen Institute Discussion Papers 02-041/3, Tinbergen Institute.
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  9. Charles King & Alvin J. Silk & Niels Ketelhöhn, 2003. "Knowledge Spillovers and Growth in the Disagglomeration of the Us Advertising-Agency Industry," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 12(3), pages 327-362, 09.
  10. Nijkamp, Peter & Poot, Jacques, 2004. "Meta-analysis of the effect of fiscal policies on long-run growth," European Journal of Political Economy, Elsevier, vol. 20(1), pages 91-124, March.
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  16. Mark J. Koetse & Henri L.F. de Groot & Raymond J.G.M. Florax, 2006. "The Impact of Uncertainty on Investment: A Meta-Analysis," Tinbergen Institute Discussion Papers 06-060/3, Tinbergen Institute.
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Cited by:
  1. Corinne Autant-Bernard & Muriel Fadairo & Nadine Massard, 2010. "Knowledge diffusion and innovation policies within the European regions: Challenges based on recent empirical evidence," Working Papers 1010, Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure.
  2. Roberto BASILE & Cristiana DONATI & Rosanna PITTIGLIO, 2013. "Industry Structure And Employment Growth: Evidence From Semiparametric Geoadditive Models," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 38, pages 121-160.
  3. Ron Boschma & Koen Frenken, 2011. "The emerging empirics of evolutionary economic geography," Journal of Economic Geography, Oxford University Press, vol. 11(2), pages 295-307, March.
  4. Martijn J. Smit & Maria A. Abreu & Henri L.F. de Groot, 2010. "Micro-Evidence on the Determinants of Innovation in The Netherlands: The Relative Importance of Absorptive Capacity and Agglomeration Externalities," Tinbergen Institute Discussion Papers 10-060/3, Tinbergen Institute.
  5. Stefan P.T. Groot & Henri L.F. de Groot & Martijn Smit, 2011. "Regional Wage Differences in the Netherlands: Micro-Evidence on Agglomeration Externalities," Tinbergen Institute Discussion Papers 11-050/3, Tinbergen Institute.
  6. Koen Frenken & Elena Cefis & Erik Stam, 2013. "Industrial dynamics and clusters: a survey," Working Papers 13-11, Utrecht School of Economics.
  7. Burger, M.J. & van Oort, F.G. & van der Knaap, G.A., 2008. "A Treatise on the Geographical Scale of Agglomeration Externalities and the Modifiable Areal Unit Problem," ERIM Report Series Research in Management ERS-2008-076-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
  8. Paolo Veneri & David Burgalassi, 2011. "Questioning Polycentric Development and its Effects. Issues of Definition and Measurement for the Italian NUTS-2 Regions," European Planning Studies, Taylor & Francis Journals, vol. 20(6), pages 1017-1037, January.
  9. Brown, Jason P. & Lambert, Dayton M. & Florax, Raymond J.G.M., 2010. "Manufacturing Transition in Local Economies: A Regional Adjustment Model," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 61130, Agricultural and Applied Economics Association.
  10. Friso Vor & Henri Groot, 2010. "Agglomeration externalities and localized employment growth: the performance of industrial sites in Amsterdam," The Annals of Regional Science, Springer, vol. 44(3), pages 409-431, June.
  11. Friso de Vor & Henri L.F. de Groot, 2008. "Agglomeration Externalities and Localized Employment Growth," Tinbergen Institute Discussion Papers 08-033/3, Tinbergen Institute.
  12. Baltzopoulos, Apostolos, 2009. "Agglomeration Externalities and Entrepreneurship - micro-level evidence from Sweden," Working Paper Series in Economics and Institutions of Innovation 190, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
  13. A. Lasagni, 2009. "Agglomeration economies: new evidence on IT employment growth in Italy," Economics Department Working Papers 2009-EP08, Department of Economics, Parma University (Italy).
  14. Roos K. Andadari & Henri L.F. de Groot & Piet Rietveld, 2012. "Production Externalities in the Wood Furniture Industry in Central Java," Tinbergen Institute Discussion Papers 12-072/3, Tinbergen Institute.
  15. Sergey Kadochnikov & Anna Fedyunina, 2013. "Export diversification in the product space and regional growth: Evidence from Russia," Papers in Evolutionary Economic Geography (PEEG) 1327, Utrecht University, Section of Economic Geography, revised Dec 2013.
  16. Valerien O. Pede & Raymond J.G.M. Florax & Henri L.F. de Groot, 2011. "Technological Leadership and Sectoral Employment Growth:A Spatial Econometric Analysis for U.S. Counties," Working Papers 11-1, Purdue University, College of Agriculture, Department of Agricultural Economics.

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