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Knowledge Spillovers and the Growth of Local Industries

  • Forni, Mario
  • Paba, Sergio

The literature on localised knowledge spillovers and growth focuses on the relative importance of intra vs. inter-industry externalities, but the nature and the characteristics of the dynamic linkages across manufacturing sectors are not investigated. In this Paper we perform a very disaggregated analysis in order to identify, for each 3-digit industry, which composition of industrial activity is more conducive to growth. We find that diversity matters for growth, but each industry needs its own diversity. We provide some evidence of clustering of industries based on dynamic externalities. We find that many spillovers occur within input-output relationships. They often originate in downstream sectors favoring the growth of upstream industries. Lastly, the importance of spillovers does not depend on the technological intensity of the industry.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 2934.

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Date of creation: Aug 2001
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Handle: RePEc:cpr:ceprdp:2934
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  1. Paul Krugman, 1992. "Geography and Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262610868, June.
  2. Audretsch, David B & Feldman, Maryann P, 1998. "Innovation in Cities: Science-Based Diversity, Specialization and Localized Competition," CEPR Discussion Papers 1980, C.E.P.R. Discussion Papers.
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  5. Henderson, Vernon & Kuncoro, Ari & Turner, Matt, 1995. "Industrial Development in Cities," Journal of Political Economy, University of Chicago Press, vol. 103(5), pages 1067-90, October.
  6. Mario Forni & Sergio Paba, 2000. "The Sources of Local Growth: Evidence from Italy," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 59(1), pages 1-49, April.
  7. Edward L. Glaeser & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1991. "Growth in Cities," NBER Working Papers 3787, National Bureau of Economic Research, Inc.
    • Glaeser, Edward Ludwig & Kallal, Hedi D. & Scheinkman, Jose A. & Shleifer, Andrei, 1992. "Growth in Cities," Scholarly Articles 3451309, Harvard University Department of Economics.
  8. Zvi Griliches, 1991. "The Search for R&D Spillovers," NBER Working Papers 3768, National Bureau of Economic Research, Inc.
  9. Paul M Romer, 1999. "Increasing Returns and Long-Run Growth," Levine's Working Paper Archive 2232, David K. Levine.
  10. Davies, Stephen & Lyons, Bruce, 1996. "Industrial Organization in the European Union: Structure, Strategy, and the Competitive Mechanism," OUP Catalogue, Oxford University Press, number 9780198289739.
  11. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
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