IDEAS home Printed from https://ideas.repec.org/p/egu/wpaper/2032.html
   My bibliography  Save this paper

Explaining the dynamics of relatedness: the role of co-location and complexity

Author

Listed:
  • Sándor Juhasz
  • Tom Broekel
  • Ron Boschma

Abstract

Relatedness has become a key concept for studying the diversification of firms, regions, and countries. However, studies tend to treat relatedness as being time-invariant or, alternatively, consider its evolution as exogenously given. This study argues that relatedness is inherently dynamic and endogenous to technological and economic developments. Using patent data, we test the extent to which relatedness between technologies developed along co-location and differences in technological complexity in the period 1980-2010. Our results show that co-located technologies are more likely to become related over time. Moreover, our results suggest that co-location and complexity of technologies are conducive to the intensification of relatedness over time.

Suggested Citation

  • Sándor Juhasz & Tom Broekel & Ron Boschma, 2020. "Explaining the dynamics of relatedness: the role of co-location and complexity," Papers in Evolutionary Economic Geography (PEEG) 2032, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Aug 2020.
    • Handle: RePEc:egu:wpaper:2032
    as

    Download full text from publisher

    File URL: http://econ.geo.uu.nl/peeg/peeg2032.pdf
    File Function: Version August 2020
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Lars Mewes, 2019. "Scaling of Atypical Knowledge Combinations in American Metropolitan Areas from 1836 to 2010," Economic Geography, Taylor & Francis Journals, vol. 95(4), pages 341-361, August.
    2. Jackie Krafft & Francesco Quatraro & Pier Paolo Saviotti, 2011. "The knowledge-base evolution in biotechnology: a social network analysis," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 20(5), pages 445-475.
    3. Frank Neffke & Martin Henning & Ron Boschma, 2011. "How Do Regions Diversify over Time? Industry Relatedness and the Development of New Growth Paths in Regions," Economic Geography, Taylor & Francis Journals, vol. 87(3), pages 237-265, July.
    4. Breschi, Stefano & Lissoni, Francesco & Malerba, Franco, 2003. "Knowledge-relatedness in firm technological diversification," Research Policy, Elsevier, vol. 32(1), pages 69-87, January.
    5. Alex Coad, 2009. "The Growth of Firms," Books, Edward Elgar Publishing, number 13424.
    6. Cesar A. Hidalgo & Ricardo Hausmann, 2009. "The Building Blocks of Economic Complexity," Papers 0909.3890, arXiv.org.
    7. Lars Mewes & Tom Broekel, 2020. "Subsidized to change? The impact of R&D policy on regional technological diversification," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 65(1), pages 221-252, August.
    8. Robin Cowan & Nicolas Jonard & Jean-Benoit Zimmermann, 2007. "Bilateral Collaboration and the Emergence of Innovation Networks," Management Science, INFORMS, vol. 53(7), pages 1051-1067, July.
    9. Carolina Castaldi & Koen Frenken & Bart Los, 2015. "Related Variety, Unrelated Variety and Technological Breakthroughs: An analysis of US State-Level Patenting," Regional Studies, Taylor & Francis Journals, vol. 49(5), pages 767-781, May.
    10. Koen Frenken & Frank Van Oort & Thijs Verburg, 2007. "Related Variety, Unrelated Variety and Regional Economic Growth," Regional Studies, Taylor & Francis Journals, vol. 41(5), pages 685-697.
    11. Maskell, Peter & Malmberg, Anders, 1999. "Localised Learning and Industrial Competitiveness," Cambridge Journal of Economics, Oxford University Press, vol. 23(2), pages 167-185, March.
    12. Flávio L. Pinheiro & Aamena Alshamsi & Dominik Hartmann & Ron Boschma & César Hidalgo, 2018. "Shooting Low or High: Do Countries Benefit from Entering Unrelated Activities?," Papers in Evolutionary Economic Geography (PEEG) 1807, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Jan 2018.
    13. Dieter F. Kogler & David L. Rigby & Isaac Tucker, 2013. "Mapping Knowledge Space and Technological Relatedness in US Cities," European Planning Studies, Taylor & Francis Journals, vol. 21(9), pages 1374-1391, September.
    14. Zvi Griliches, 1998. "Patent Statistics as Economic Indicators: A Survey," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 287-343, National Bureau of Economic Research, Inc.
    15. Alberto Dalmazzo, 2002. "Technological Complexity, Wage Differentials and Unemployment," Scandinavian Journal of Economics, Wiley Blackwell, vol. 104(4), pages 515-530, December.
    16. Ron Boschma & Pierre-Alexandre Balland & Dieter Franz Kogler, 2015. "Relatedness and technological change in cities: the rise and fall of technological knowledge in US metropolitan areas from 1981 to 2010," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 24(1), pages 223-250.
    17. Diodato, Dario & Neffke, Frank & O’Clery, Neave, 2018. "Why do industries coagglomerate? How Marshallian externalities differ by industry and have evolved over time," Journal of Urban Economics, Elsevier, vol. 106(C), pages 1-26.
    18. Dosi, Giovanni, 1993. "Technological paradigms and technological trajectories : A suggested interpretation of the determinants and directions of technical change," Research Policy, Elsevier, vol. 22(2), pages 102-103, April.
    19. Rune Dahl Fitjar & Paul Benneworth & Bjørn Terje Asheim, 2019. "Towards regional responsible research and innovation? Integrating RRI and RIS3 in European innovation policy," Science and Public Policy, Oxford University Press, vol. 46(5), pages 772-783.
    20. Dirk Fornahl & Tom Broekel & Ron Boschma, 2011. "What drives patent performance of German biotech firms? The impact of R&D subsidies, knowledge networks and their location," Papers in Regional Science, Wiley Blackwell, vol. 90(2), pages 395-418, June.
    21. Frank M.H. Neffke & Martin Henning & Ron Boschma, 2012. "The impact of aging and technological relatedness on agglomeration externalities: a survival analysis," Journal of Economic Geography, Oxford University Press, vol. 12(2), pages 485-517, March.
    22. Adam B. Jaffe & Manuel Trajtenberg & Rebecca Henderson, 1993. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," The Quarterly Journal of Economics, Oxford University Press, vol. 108(3), pages 577-598.
    23. Pierre-Alexandre Balland & Ron Boschma & Koen Frenken, 2015. "Proximity and Innovation: From Statics to Dynamics," Regional Studies, Taylor & Francis Journals, vol. 49(6), pages 907-920, June.
    24. Glenn Ellison & Edward L. Glaeser & William R. Kerr, 2010. "What Causes Industry Agglomeration? Evidence from Coagglomeration Patterns," American Economic Review, American Economic Association, vol. 100(3), pages 1195-1213, June.
    25. Tom Broekel & Matthias Brachert, 2015. "The structure and evolution of inter-sectoral technological complementarity in R&D in Germany from 1990 to 2011," Journal of Evolutionary Economics, Springer, vol. 25(4), pages 755-785, September.
    26. repec:fth:harver:1473 is not listed on IDEAS
    27. Jackie Krafft & Francesco Quatraro & Pier-Paolo Saviotti, 2014. "The dynamics of knowledge-intensive sectors’ knowledge base: Evidence from Biotechnology and Telecommunications," Post-Print halshs-01225834, HAL.
    28. Nees Jan van Eck & Ludo Waltman, 2009. "How to normalize cooccurrence data? An analysis of some well‐known similarity measures," Journal of the American Society for Information Science and Technology, Association for Information Science & Technology, vol. 60(8), pages 1635-1651, August.
    29. Pierre-Alexandre Balland & David Rigby, 2017. "The Geography of Complex Knowledge," Economic Geography, Taylor & Francis Journals, vol. 93(1), pages 1-23, January.
    30. Max-Peter Menzel, 2015. "Interrelating Dynamic Proximities by Bridging, Reducing and Producing Distances," Regional Studies, Taylor & Francis Journals, vol. 49(11), pages 1892-1907, November.
    31. Jackie Krafft & Francesco Quatraro & Pier Paolo Saviotti, 2014. "The Dynamics of Knowledge-intensive Sectors' Knowledge Base: Evidence from Biotechnology and Telecommunications," Industry and Innovation, Taylor & Francis Journals, vol. 21(3), pages 215-242, April.
    32. Fl'avio L. Pinheiro & Aamena Alshamsi & Dominik Hartmann & Ron Boschma & C'esar A. Hidalgo, 2018. "Shooting High or Low: Do Countries Benefit from Entering Unrelated Activities?," Papers 1801.05352, arXiv.org, revised Mar 2018.
    33. Tom Broekel & Pierre-Alexandre Balland & Martijn Burger & Frank Oort, 2014. "Modeling knowledge networks in economic geography: a discussion of four methods," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 53(2), pages 423-452, September.
    34. Audretsch, David B & Feldman, Maryann P, 1996. "R&D Spillovers and the Geography of Innovation and Production," American Economic Review, American Economic Association, vol. 86(3), pages 630-640, June.
    35. Ron Boschma, 2017. "Relatedness as driver of regional diversification: a research agenda," Regional Studies, Taylor & Francis Journals, vol. 51(3), pages 351-364, March.
    36. C. A. Hidalgo & B. Klinger & A. -L. Barabasi & R. Hausmann, 2007. "The Product Space Conditions the Development of Nations," Papers 0708.2090, arXiv.org.
    37. Pierre-Alexandre Balland & Ron Boschma & Joan Crespo & David L. Rigby, 2019. "Smart specialization policy in the European Union: relatedness, knowledge complexity and regional diversification," Regional Studies, Taylor & Francis Journals, vol. 53(9), pages 1252-1268, September.
    38. von Hippel, Eric, 1987. "Cooperation between rivals: Informal know-how trading," Research Policy, Elsevier, vol. 16(6), pages 291-302, December.
    39. Matthias Buerger & Tom Broekel & Alex Coad, 2012. "Regional Dynamics of Innovation: Investigating the Co-evolution of Patents, Research and Development (R&D), and Employment," Regional Studies, Taylor & Francis Journals, vol. 46(5), pages 565-582, August.
    40. David J. Teece & Richard Rumelt & Giovanni Dosi & Sidney Winter, 2000. "Understanding Corporate Coherence: Theory and Evidence," Chapters, in: Innovation, Organization and Economic Dynamics, chapter 9, pages 264-293, Edward Elgar Publishing.
    41. Jackie Krafft & Francesco Quatraro & Pier-Paolo Saviotti, 2014. "The dynamics of knowledge-intensive sectors' knowledge base: Evidence from Biotechnology and Telecommunications," Post-Print hal-02118411, HAL.
    42. Fleming, Lee & Sorenson, Olav, 2001. "Technology as a complex adaptive system: evidence from patent data," Research Policy, Elsevier, vol. 30(7), pages 1019-1039, August.
    43. Dalmazzo, Alberto, 2002. " Technological Complexity, Wage Differentials and Unemployment," Scandinavian Journal of Economics, Wiley Blackwell, vol. 104(4), pages 515-530, December.
    44. Sorenson, Olav & Fleming, Lee, 2004. "Science and the diffusion of knowledge," Research Policy, Elsevier, vol. 33(10), pages 1615-1634, December.
    45. Ron Boschma, 2017. "Relatedness as driver behind regional diversification: a research agenda," Papers in Evolutionary Economic Geography (PEEG) 1702, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Jan 2017.
    46. Tom Broekel, 2019. "Using structural diversity to measure the complexity of technologies," PLOS ONE, Public Library of Science, vol. 14(5), pages 1-23, May.
    47. David L. Rigby, 2015. "Technological Relatedness and Knowledge Space: Entry and Exit of US Cities from Patent Classes," Regional Studies, Taylor & Francis Journals, vol. 49(11), pages 1922-1937, November.
    48. Pierre Desrochers & Samuli Leppälä, 2011. "Opening up the 'Jacobs Spillovers' black box: local diversity, creativity and the processes underlying new combinations," Journal of Economic Geography, Oxford University Press, vol. 11(5), pages 843-863, September.
    49. van Eck, N.J.P. & Waltman, L., 2009. "How to Normalize Co-Occurrence Data? An Analysis of Some Well-Known Similarity Measures," ERIM Report Series Research in Management ERS-2009-001-LIS, 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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Balland, Pierre-Alexandre & Broekel, Tom & Diodato, Dario & Giuliani, Elisa & Hausmann, Ricardo & O'Clery, Neave & Rigby, David, 2022. "Reprint of The new paradigm of economic complexity," Research Policy, Elsevier, vol. 51(8).
    2. Tom Broekel & Louis Knupling & Lars Mewes, 2023. "Boosting, Sorting, and Complexity. Urban Scaling of Innovation Around the World," Papers in Evolutionary Economic Geography (PEEG) 2308, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Mar 2023.
    3. Valeriy Anatolievich Kryukov & Vladimir Vitalievich Shmat, 2022. "Asian Russia – Conditions for and Obstacles to Progressive Diversification of Macroregional Economy," Spatial Economics=Prostranstvennaya Ekonomika, Economic Research Institute, Far Eastern Branch, Russian Academy of Sciences (Khabarovsk, Russia), issue 1, pages 34-72.
    4. Harald Bathelt & Michael Storper, 2022. "Related Variety and Regional Development," Papers in Evolutionary Economic Geography (PEEG) 2214, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Aug 2022.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. David L. Rigby & Christoph Roesler & Dieter Kogler & Ron Boschma & Pierre-Alexandre Balland, 2019. "Do EU regions benefit from smart specialization?," Papers in Evolutionary Economic Geography (PEEG) 1931, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Nov 2019.
    2. Pierre-Alexandre Balland & Ron Boschma & Joan Crespo & David L. Rigby, 2017. "Smart Specialization policy in the EU: Relatedness, Knowledge Complexity and Regional Diversification," Papers in Evolutionary Economic Geography (PEEG) 1717, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Jul 2017.
    3. Abbasiharofteh, Milad & Kogler, Dieter F. & Lengyel, Balázs, 2023. "Atypical combinations of technologies in regional co-inventor networks," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 52(10), pages 1-1.
    4. Pinheiro, Flávio L. & Hartmann, Dominik & Boschma, Ron & Hidalgo, César A., 2022. "The time and frequency of unrelated diversification," Research Policy, Elsevier, vol. 51(8).
    5. Ron Boschma, 2018. "The geographical dimension of structural change," Papers in Evolutionary Economic Geography (PEEG) 1839, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Nov 2018.
    6. Jason Deegan & Tom Broekel & Rune Dahl Fitjar, 2021. "Searching through the Haystack:The Relatedness and Complexity of Priorities in Smart Specialization Strategies," Economic Geography, Taylor & Francis Journals, vol. 97(5), pages 497-520, October.
    7. Nils Grashof & Stefano Basilico, 2023. "The dark side of green innovation? Green transition and regional inequality in Europe," Papers in Evolutionary Economic Geography (PEEG) 2314, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Jun 2023.
    8. Balland, Pierre-Alexandre & Broekel, Tom & Diodato, Dario & Giuliani, Elisa & Hausmann, Ricardo & O'Clery, Neave & Rigby, David, 2022. "Reprint of The new paradigm of economic complexity," Research Policy, Elsevier, vol. 51(8).
    9. Duygu Buyukyazici & Leonardo Mazzoni & Massimo Riccaboni & Francesco Serti, 2022. "Workplace Skills as Regional Capabilities: Relatedness, Complexity and Industrial Diversification of Regions," Papers in Evolutionary Economic Geography (PEEG) 2210, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Jun 2022.
    10. Tom Broekel & Lars Mewes, 2017. "Analyzing the impact of R&D policy on regional diversification," Papers in Evolutionary Economic Geography (PEEG) 1726, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Sep 2017.
    11. Valentina Di Iasio & Ernest Miguelez, 2022. "The ties that bind and transform: knowledge remittances, relatedness and the direction of technical change [Brain drain or brain bank? The impact of skilled emigration on poor-country innovation]," Journal of Economic Geography, Oxford University Press, vol. 22(2), pages 423-448.
    12. Hidalgo, César A., 2023. "The policy implications of economic complexity," Research Policy, Elsevier, vol. 52(9).
    13. Ron Boschma & Ernest Miguelez & Rosina Moreno & Diego B. Ocampo-Corrales, 2021. "Technological breakthroughs in European regions: the role of related and unrelated combinations," Papers in Evolutionary Economic Geography (PEEG) 2118, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Jun 2021.
    14. Eduardo Hernandez-Rodriguez & Ron Boschma & Andrea Morrison & Xianjia Ye, 2023. "Functional upgrading and downgrading in global value chains: Evidence from EU regions using a relatedness/complexity framework," Papers in Evolutionary Economic Geography (PEEG) 2316, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Jul 2023.
    15. Zoran Utkovski & Melanie F Pradier & Viktor Stojkoski & Fernando Perez-Cruz & Ljupco Kocarev, 2018. "Economic complexity unfolded: Interpretable model for the productive structure of economies," PLOS ONE, Public Library of Science, vol. 13(8), pages 1-24, August.
    16. Pintar, Nico & Scherngell, Thomas, 2022. "The complex nature of regional knowledge production: Evidence on European regions," Research Policy, Elsevier, vol. 51(8).
    17. Balland, Pierre-Alexandre & Broekel, Tom & Diodato, Dario & Giuliani, Elisa & Hausmann, Ricardo & O'Clery, Neave & Rigby, David, 2022. "The new paradigm of economic complexity," Research Policy, Elsevier, vol. 51(3).
    18. Melissa Haller & David L. Rigby, 2020. "The geographic evolution of optics technologies in the United States, 1976–2010," Papers in Regional Science, Wiley Blackwell, vol. 99(6), pages 1539-1559, December.
    19. Kolja Hesse & Dirk Fornahl, 2020. "Essential ingredients for radical innovations? The role of (un‐)related variety and external linkages in Germany," Papers in Regional Science, Wiley Blackwell, vol. 99(5), pages 1165-1183, October.
    20. Balland, Pierre-Alexandre & Boschma, Ron, 2022. "Do scientific capabilities in specific domains matter for technological diversification in European regions?," Research Policy, Elsevier, vol. 51(10).

    More about this item

    Keywords

    co-agglomeration; complexity; Geography; relatedness;
    All these keywords.

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:egu:wpaper:2032. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/deguunl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.