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The Principle of Relatedness

Author

Listed:
  • César Hidalgo
  • Pierre-Alexandre Balland
  • Ron Boschma
  • Mercedes Delgado
  • Maryann Feldma
  • Koen Frenken
  • Edward Glaeser
  • Canfei He
  • Dieter F. Kogler
  • Andrea Morrison
  • Frank Neffke
  • David Rigby
  • Scott Stern
  • Siqi Zheng
  • Shengjun Zhu

Abstract

The idea that skills, technology, and knowledge, are spatially concentrated, has a long academic tradition. Yet, only recently this hypothesis has been empirically formalized and corroborated at multiple spatial scales, for different economic activities, and for a diversity of institutional regimes. The new synthesis is an empirical principle describing the probability that a region enters - or exits - an economic activity as a function of the number of related activities pre- sent in that location. In this paper we summarize some of the recent empirical evidence that has generalized the principle of relatedness to a fact describing the entry and exit of products, industries, occupations, and technologies, at the national, regional, and metropolitan scales. We conclude by describing some of the policy implications and future avenues of research implied by this robust empirical principle.

Suggested Citation

  • César Hidalgo & Pierre-Alexandre Balland & Ron Boschma & Mercedes Delgado & Maryann Feldma & Koen Frenken & Edward Glaeser & Canfei He & Dieter F. Kogler & Andrea Morrison & Frank Neffke & David Rigby, 2018. "The Principle of Relatedness," Papers in Evolutionary Economic Geography (PEEG) 1830, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Jul 2018.
    • Handle: RePEc:egu:wpaper:1830
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    File URL: http://econ.geo.uu.nl/peeg/peeg1830.pdf
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    References listed on IDEAS

    as
    1. Matthew E. Kahn & Weizeng Sun & Jianfeng Wu & Siqi Zheng, 2018. "The Revealed Preference of the Chinese Communist Party Leadership: Investing in Local Economic Development versus Rewarding Social Connections," NBER Working Papers 24457, National Bureau of Economic Research, Inc.
    2. Hausmann, Ricardo & Hidalgo, Cesar, 2014. "The Atlas of Economic Complexity: Mapping Paths to Prosperity," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262525429, December.
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    Keywords

    economic complexity; relatedness; economic geography;
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