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Mapping Sectoral Patterns of Technological Accumulation into the Geography of Corporate Locations. A Simple Model and Some Promising Evidence

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  • Giulio Bottazzi
  • Giorgio Fagiolo
  • Giovanni Dosi

Abstract

Economies of agglomeration are central in understanding the emergence of industrial clustering. However, existing models that incorporate economies of agglomeration to explain industrial concentration have been providing a quite small set of empirically testable predictions. In this paper, we propose a baseline model in which myopic firms make reversible locational choices in presence of dynamic increasing returns from agglomeration. Despite its simplicity, the model is able to deliver predictions about the long-run distribution of the size of spatial clusters. We test the predictions of the model against data on geographical distribution of Italian firms across industrial districts. We show that, at least in some benchmark industries, accordance of theoretical predictions with data is quite high. Finally, we explore the extents to which industrial sectors exhibit different economies of agglomeration. We find that geographical clustering is highly affected by intersectoral differences in industrial innovation patterns and learning regimes.

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Bibliographic Info

Paper provided by Society for Computational Economics in its series Computing in Economics and Finance 2003 with number 268.

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Date of creation: 01 Aug 2003
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Handle: RePEc:sce:scecf3:268

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Keywords: Industrial Clustering; Economies of Agglomeration; Firm Locational Choice; Industry Dynamics; Inter-Sectoral Differences.;

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  1. Dosi, Giovanni, 1988. "Sources, Procedures, and Microeconomic Effects of Innovation," Journal of Economic Literature, American Economic Association, vol. 26(3), pages 1120-71, September.
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  12. Malerba, Franco, 1992. "Learning by Firms and Incremental Technical Change," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 102(413), pages 845-59, July.
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  14. John Cantwell & Simona Iammarino, 1998. "MNCs, Technological Innovation and Regional Systems in the EU: Some Evidence in the Italian Case," International Journal of the Economics of Business, Taylor & Francis Journals, Taylor & Francis Journals, vol. 5(3), pages 383-408.
  15. Rauch, James E, 1993. "Does History Matter Only When It Matters Little? The Case of City-Industry Location," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 108(3), pages 843-67, August.
  16. Masahisa Fujita & Paul Krugman & Anthony J. Venables, 2001. "The Spatial Economy: Cities, Regions, and International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262561476, December.
  17. Robin Cowan & William Cowan, 1998. "On Clustering in the Location of R&D: Statics and Dynamics," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 6(2-3), pages 201-230.
  18. Fujita, Masahisa & Hamaguchi, Nobuaki, 2001. "Intermediate goods and the spatial structure of an economy," Regional Science and Urban Economics, Elsevier, Elsevier, vol. 31(1), pages 79-109, February.
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Cited by:
  1. Simona Iammarino & Philip McCann, 2006. "The Structure and Evolution of Industrial Clusters: Transactions, Technology and Knowledge Spillovers," SPRU Working Paper Series 138, SPRU - Science and Technology Policy Research, University of Sussex.

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