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Technological Diversity and Jacobs' Externality Hypothesis Revisited

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  • OLOF EJERMO

Abstract

Recent empirical evidence strongly supports Jacobs's (1969) externality hypothesis that urban diversity provides a more favorable environment for economic development than urban specialization. In order to correctly gauge Jacobs's hypothesis, economic development should be understood as a result of innovations. Furthermore, a relevant diversity measure should take into account the degree of diversity of the inherent classes (e.g. pharmaceuticals are closer to chemicals than to forestry). These ideas are tested using regionally classified Swedish patent application data as a measure of innovativeness. Patent data are also used to reflect technological diversity. The results show that the number of patent applications in Swedish regions is highly and positively dependent on regional technological specialization, quite the opposite of Jacobs's prediction. This paper raises general questions about earlier empirical results. It is concluded that the size of regions is an important factor to consider, since this in itself may affect patenting intensity and technological diversity. Copyright 2005 Blackwell Publishing Ltd..

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  • Olof Ejermo, 2005. "Technological Diversity and Jacobs' Externality Hypothesis Revisited," Growth and Change, Wiley Blackwell, vol. 36(2), pages 167-195.
  • Handle: RePEc:bla:growch:v:36:y:2005:i:2:p:167-195
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    Cited by:

    1. Andrea Morescalchi & Sjoerd Hardeman, 2015. "Technological diversity and the impact of regional innovation: evidence for the EU," ERSA conference papers ersa15p1250, European Regional Science Association.
    2. repec:taf:entreg:v:28:y:2016:i:9-10:p:746-767 is not listed on IDEAS
    3. 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.
    4. Fritsch, Michael & Changoluisa, Javier, 2017. "New business formation and the productivity of manufacturing incumbents: Effects and mechanisms," Journal of Business Venturing, Elsevier, vol. 32(3), pages 237-259.
    5. Matthias Firgo & Peter Mayerhofer, 2015. "Wissens-Spillovers und regionale Entwicklung - welche strukturpolitische Ausrichtung optimiert des Wachstum?," Working Paper Reihe der AK Wien - Materialien zu Wirtschaft und Gesellschaft 144, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik.
    6. Arauzo Carod, Josep Maria & Faggian, Alessandra & Mañé Vernet, Ferran, 2010. "Internal and External Determinants of Radical and incremental Innovation in SMEs: the case of Catalonia," Working Papers 2072/179605, Universitat Rovira i Virgili, Department of Economics.
    7. 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, vol. 24(1), pages 223-250.
    8. Matthias Firgo & Peter Mayerhofer, 2016. "(Un-)Related Variety and Employment Growth at the Sub-Regional Level," WIFO Working Papers 511, WIFO.
    9. Livanis, Grigorios & Lamin, Anna, 2016. "Knowledge, Proximity and R&D Exodus," Research Policy, Elsevier, vol. 45(1), pages 8-26.
    10. repec:taf:regstd:v:51:y:2017:i:4:p:523-536 is not listed on IDEAS
    11. Beaudry, Catherine & Schiffauerova, Andrea, 2009. "Who's right, Marshall or Jacobs? The localization versus urbanization debate," Research Policy, Elsevier, vol. 38(2), pages 318-337, March.
    12. Ning, Lutao & Wang, Fan & Li, Jian, 2016. "Urban innovation, regional externalities of foreign direct investment and industrial agglomeration: Evidence from Chinese cities," Research Policy, Elsevier, vol. 45(4), pages 830-843.
    13. Sofia Wixe & Martin Andersson, 2017. "Which types of relatedness matter in regional growth? Industry, occupation and education," Regional Studies, Taylor & Francis Journals, vol. 51(4), pages 523-536, April.
    14. Feldman, Maryann & Tavassoli, Sam, 2014. "Something New: Where do new industries come from?," Working Papers 2014/02, Blekinge Institute of Technology, Department of Industrial Economics.
    15. Sam Tavassoli & Nunzia Carbonara, 2014. "The role of knowledge variety and intensity for regional innovation," Small Business Economics, Springer, vol. 43(2), pages 493-509, August.
    16. Sam Tavassoli & Nunzia Carbonara, 2013. "The Role of Knowledge Variety and Intensity for Regional Innovative Capability - Swedish evidence," Papers in Evolutionary Economic Geography (PEEG) 1317, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Oct 2013.
    17. Silvia Rita Sedita & Ivan De Noni & Roberta Apa & Luigi Orsi, 2016. "Measuring how the knowledge space shapes the technological progress of European regions," Papers in Evolutionary Economic Geography (PEEG) 1624, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Aug 2016.
    18. Saheum Hong & Yu Xiao, 2016. "The Influence of Multiple Specializations on Economic Performance in U.S. Metropolitan Areas," Sustainability, MDPI, Open Access Journal, vol. 8(9), pages 1-16, September.
    19. Theodore Tsekeris & Klimis Vogiatzoglou, 2014. "Public infrastructure investments and regional specialization: empirical evidence from Greece," Regional Science Policy & Practice, Wiley Blackwell, vol. 6(3), pages 265-289, August.
    20. Sam Tavassoli & Viroj Jienwatcharamongkhol, 2016. "Survival of entrepreneurial firms: the role of agglomeration externalities," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 28(9-10), pages 746-767, October.
    21. Annapoornima M. Subramanian & Young Rok Choi & Soo-Hoon Lee & Chang-Chieh Hang, 2016. "Linking technological and educational level diversities to innovation performance," The Journal of Technology Transfer, Springer, vol. 41(2), pages 182-204, April.

    More about this item

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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