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Social Ties, Knowledge Spillovers and Regional Convergence

  • Albert de Vaal
  • Tom Gosens
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    We take the Fujita & Thisse (2003) growth-cum-geography model to investigate the implications of seeing social ties as an important reason for the generation of knowledge. Moreover, we model migration as an important channel through which the distance decay effect of cross-regional knowledge spillovers materialize. Our results show that in such a setting the full agglomeration of high-skilled workers that are engaged in R&D activities is not a straightforward outcome. The equilibrium with an equally dispersed high-skilled labour force is a stable migration equilibrium, while regions with a larger initial share of high-skilled workers will only attract more workers when migration rates are not too high. When social ties are important in generating knowledge and knowledge spillovers, the full agglomeration of high-skilled workers in one region is not at all certain. In such a case, growth is however not optimal. As such, the trade-off between reaching optimal growth and equal distribution of economic activity remains.

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    File URL: http://degit.sam.sdu.dk/papers/degit_15/c015_023.pdf
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    Paper provided by DEGIT, Dynamics, Economic Growth, and International Trade in its series DEGIT Conference Papers with number c015_023.

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    Length: 23 Pages
    Date of creation: Sep 2010
    Date of revision:
    Handle: RePEc:deg:conpap:c015_023
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    1. Kyoko Hirose, 2005. "Migration and agglomeration with knowledge spillovers," Discussion Papers in Economics and Business 05-16, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
    2. Agrawal, Ajay & Kapur, Devesh & McHale, John, 2008. "How do spatial and social proximity influence knowledge flows? Evidence from patent data," Journal of Urban Economics, Elsevier, vol. 64(2), pages 258-269, September.
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