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The Emergence of New Industries at the Regional Level in S pain: A Proximity Approach Based on Product Relatedness

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  • Ron Boschma
  • Asier Minondo
  • Mikel Navarro

Abstract

How do regions diversify over time? Inspired by recent studies, we argue that regions diversify into industries that make use of capabilities in which regions are specialized. Since the spread of capabilities occurs through mechanisms that have a strong regional bias, we expect that capabilities that are available at the regional level play a larger role than do capabilities that are available at the country level for the development of new industries. To test this hypothesis, we analyze the emergence of new industries in 50 S panish regions at the NUTS 3 level in the period 1988–2008. We calculate the capability-distance between new export products and existing export products in S panish regions and provide econometric evidence that regions tend to diversify into new industries that use similar capabilities as existing industries in these regions. We show that proximity to the regional industrial structure plays a much larger role in the emergence of new industries in regions than does proximity to the national industrial structure. This finding suggests that capabilities at the regional level enable the development of new industries.

Suggested Citation

  • Ron Boschma & Asier Minondo & Mikel Navarro, 2013. "The Emergence of New Industries at the Regional Level in S pain: A Proximity Approach Based on Product Relatedness," Economic Geography, Taylor & Francis Journals, vol. 89(1), pages 29-51, January.
    • Handle: RePEc:taf:recgxx:v:89:y:2013:i:1:p:29-51
    DOI: 10.1111/j.1944-8287.2012.01170.x
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    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • N94 - Economic History - - Regional and Urban History - - - Europe: 1913-
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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