IDEAS home Printed from https://ideas.repec.org/p/egu/wpaper/1004.html
   My bibliography  Save this paper

Localized Spillovers and Knowledge Flows: How Does Proximity Influence the Performance of Plants?

Author

Listed:
  • Rikard Eriksson

    ()

Abstract

By means of a unique longitudinal database with information on all plants and employees in the Swedish economy, this paper analyzes how geographical proximity influences the impact of spillovers and knowledge flows on the productivity growth of plants. Concerning the effects of spillovers, we show that the density of economic activities as such mainly contributes to plant performance within a very short distance and that the composition of economic activities is more influential further away. Regarding the influence of local industrial setup, proximity increases the need to be located near different, but related, industries whereas increased distance implies a greater effect of intra-industry spillovers. The analyses also demonstrate that knowledge flows via the mobility of skilled labor is primarily a sub-regional phenomenon. Only inflows of skills that are related to the existing knowledge base of plants and come from less than 50 kilometers away have a positive effect on plant performance. Concerning outflows of skills, the results indicate that it is less harmful for a dispatching plant if a former employee remains within the local economy as compared to leaving for a job in another part of the national economy.

Suggested Citation

  • Rikard Eriksson, 2010. "Localized Spillovers and Knowledge Flows: How Does Proximity Influence the Performance of Plants?," Papers in Evolutionary Economic Geography (PEEG) 1004, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Mar 2010.
  • Handle: RePEc:egu:wpaper:1004
    as

    Download full text from publisher

    File URL: http://econ.geo.uu.nl/peeg/peeg1004.pdf
    File Function: Version March 2010
    Download Restriction: no

    References listed on IDEAS

    as
    1. Malerba, Franco, 2002. "Sectoral systems of innovation and production," Research Policy, Elsevier, vol. 31(2), pages 247-264, February.
    2. Ron A. Boschma & Jan G. Lambooy, 1999. "Evolutionary economics and economic geography," Journal of Evolutionary Economics, Springer, vol. 9(4), pages 411-429.
    3. Tom Broekel & Andreas Meder, 2008. "The Bright and Dark Side of Cooperation for Regional Innovation Performance," DRUID Working Papers 08-12, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    4. Ron A. Boschma & Rik Wenting, 2007. "The spatial evolution of the British automobile industry: Does location matter?," Industrial and Corporate Change, Oxford University Press, vol. 16(2), pages 213-238, April.
    5. Frank Neffke & Martin Svensson Henning, 2008. "Revealed Relatedness: Mapping Industry Space," Papers in Evolutionary Economic Geography (PEEG) 0819, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Dec 2008.
    6. Guido Buenstorf & Steven Klepper, 2009. "Heritage and Agglomeration: The Akron Tyre Cluster Revisited," Economic Journal, Royal Economic Society, vol. 119(537), pages 705-733, April.
    7. Feldman, Maryann P. & Audretsch, David B., 1999. "Innovation in cities:: Science-based diversity, specialization and localized competition," European Economic Review, Elsevier, vol. 43(2), pages 409-429, February.
    8. J. Stan Metcalfe & John Foster & Ronnie Ramlogan, 2006. "Adaptive economic growth," Cambridge Journal of Economics, Oxford University Press, vol. 30(1), pages 7-32, January.
    9. Anders Malmberg & Peter Maskell, 2002. "The elusive concept of localization economies: towards a knowledge-based theory of spatial clustering," Environment and Planning A, Pion Ltd, London, vol. 34(3), pages 429-449, March.
    10. Consoli, Davide, 2005. "The dynamics of technological change in UK retail banking services: An evolutionary perspective," Research Policy, Elsevier, vol. 34(4), pages 461-480, May.
    11. Richard R. Nelson, 2002. "special issue: Bringing institutions into evolutionary growth theory," Journal of Evolutionary Economics, Springer, vol. 12(1), pages 17-28.
    12. Cantner, Uwe & Graf, Holger, 2006. "The network of innovators in Jena: An application of social network analysis," Research Policy, Elsevier, vol. 35(4), pages 463-480, May.
    13. Koen Frenken & Ron A. Boschma, 2007. "A theoretical framework for evolutionary economic geography: industrial dynamics and urban growth as a branching process," Journal of Economic Geography, Oxford University Press, vol. 7(5), pages 635-649, September.
    14. Arthur, W Brian, 1989. "Competing Technologies, Increasing Returns, and Lock-In by Historical Events," Economic Journal, Royal Economic Society, vol. 99(394), pages 116-131, March.
    15. Matthias Klaes, 2004. "Evolutionary economics: In defence of 'vagueness'," Journal of Economic Methodology, Taylor & Francis Journals, vol. 11(3), pages 359-376.
    16. Martin, Ron, 1999. "The New 'Geographical Turn' in Economics: Some Critical Reflections," Cambridge Journal of Economics, Oxford University Press, vol. 23(1), pages 65-91, January.
    17. Henderson, Vernon & Kuncoro, Ari & Turner, Matt, 1995. "Industrial Development in Cities," Journal of Political Economy, University of Chicago Press, vol. 103(5), pages 1067-1090, October.
    18. Max-Peter Menzel, 2008. "Dynamic Proximities – Changing Relations by Creating and Bridging Distances," Papers in Evolutionary Economic Geography (PEEG) 0816, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Oct 2008.
    19. Evert-Jan Visser, 2009. "The Complementary Dynamic Effects of Clusters and Networks," Industry and Innovation, Taylor & Francis Journals, vol. 16(2), pages 167-195.
    20. Swann, Peter & Prevezer, Martha, 1996. "A comparison of the dynamics of industrial clustering in computing and biotechnology," Research Policy, Elsevier, vol. 25(7), pages 1139-1157, October.
    21. John Foster, 2000. "Competitive selection, self-organisation and Joseph A. Schumpeter," Journal of Evolutionary Economics, Springer, vol. 10(3), pages 311-328.
    22. C. A. Hidalgo & B. Klinger & A. -L. Barabasi & R. Hausmann, 2007. "The Product Space Conditions the Development of Nations," Papers 0708.2090, arXiv.org.
    23. Jürgen Essletzbichler & David Rigby, 2005. "Competition, Variety And The Geography Of Technology Evolution," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 96(1), pages 48-62, February.
    24. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    25. Fulvio Castellacci, 2006. "A critical realist interpretation of evolutionary growth theorising," Cambridge Journal of Economics, Oxford University Press, vol. 30(6), pages 861-880, November.
    26. Glaeser, Edward L & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1992. "Growth in Cities," Journal of Political Economy, University of Chicago Press, vol. 100(6), pages 1126-1152, December.
      • 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.
    27. Ron Martin & Peter Sunley, 2006. "Path dependence and regional economic evolution," Journal of Economic Geography, Oxford University Press, vol. 6(4), pages 395-437, August.
    28. Hagedoorn, John, 2002. "Inter-firm R&D partnerships: an overview of major trends and patterns since 1960," Research Policy, Elsevier, vol. 31(4), pages 477-492, May.
    29. Giuliani, Elisa & Bell, Martin, 2005. "The micro-determinants of meso-level learning and innovation: evidence from a Chilean wine cluster," Research Policy, Elsevier, vol. 34(1), pages 47-68, February.
    30. Kurt Dopfer & Jason Potts, 2004. "Evolutionary realism: a new ontology for economics," Journal of Economic Methodology, Taylor & Francis Journals, vol. 11(2), pages 195-212.
    31. Ron Boschma & Rikard Eriksson & Urban Lindgren, 2009. "How does labour mobility affect the performance of plants? The importance of relatedness and geographical proximity," Journal of Economic Geography, Oxford University Press, vol. 9(2), pages 169-190, March.
    32. Elisa Giuliani, 2007. "The selective nature of knowledge networks in clusters: evidence from the wine industry," Journal of Economic Geography, Oxford University Press, vol. 7(2), pages 139-168, March.
    33. Heiner, Ronald A, 1983. "The Origin of Predictable Behavior," American Economic Review, American Economic Association, vol. 73(4), pages 560-595, September.
    34. Richard Nelson, 1995. "Co-evolution of Industry Structure, Technology and Supporting Institutions, and the Making of Comparative Advantage," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 2(2), pages 171-184.
    35. Ron A. Boschma & Koen Frenken, 2006. "Why is economic geography not an evolutionary science? Towards an evolutionary economic geography," Journal of Economic Geography, Oxford University Press, vol. 6(3), pages 273-302, June.
    36. Danny MacKinnon & Andrew Cumbers & Andy Pike & Kean Birch & Robert McMaster, 2009. "Evolution in Economic Geography: Institutions, Political Economy, and Adaptation," Economic Geography, Clark University, vol. 85(2), pages 129-150, April.
    37. Andrea Morrison, 2008. "Gatekeepers of Knowledge within Industrial Districts: Who They Are, How They Interact," Regional Studies, Taylor & Francis Journals, vol. 42(6), pages 817-835.
    38. Nooteboom, Bart & Van Haverbeke, Wim & Duysters, Geert & Gilsing, Victor & van den Oord, Ad, 2007. "Optimal cognitive distance and absorptive capacity," Research Policy, Elsevier, vol. 36(7), pages 1016-1034, September.
    39. Fine, Ben, 2000. "Endogenous Growth Theory: A Critical Assessment," Cambridge Journal of Economics, Oxford University Press, vol. 24(2), pages 245-265, March.
    40. Simona Iammarino, 2005. "An evolutionary integrated view of Regional Systems of Innovation: Concepts, measures and historical perspectives," European Planning Studies, Taylor & Francis Journals, vol. 13(4), pages 497-519, June.
    41. Otto Raspe & Frank Van Oort, 2006. "The Knowledge Economy and Urban Economic Growth," European Planning Studies, Taylor & Francis Journals, vol. 14(9), pages 1209-1234, May.
    42. Ron Boschma & Simona Iammarino, 2009. "Related Variety, Trade Linkages, and Regional Growth in Italy," Economic Geography, Clark University, vol. 85(3), pages 289-311, July.
    43. Uwe Cantner & Andreas Meder, 2007. "Technological proximity and the choice of cooperation partner," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 2(1), pages 45-65, June.
    44. Nelson, Richard R. & Winter, Sidney G., 1993. "In search of useful theory of innovation," Research Policy, Elsevier, vol. 22(2), pages 108-108, April.
    45. J. Stanley Metcalfe & John Foster (ed.), 2004. "Evolution and Economic Complexity," Books, Edward Elgar Publishing, number 3216, April.
    46. Cooke, Philip, 2001. "Regional Innovation Systems, Clusters, and the Knowledge Economy," Industrial and Corporate Change, Oxford University Press, vol. 10(4), pages 945-974, December.
    47. M. Ozman, 2009. "Inter-firm networks and innovation: a survey of literature," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 18(1), pages 39-67.
    48. Udo Staber, 2007. "A Matter of Distrust: Explaining the Persistence of Dysfunctional Beliefs in Regional Clusters," Growth and Change, Wiley Blackwell, vol. 38(3), pages 341-363.
    49. Rik Wenting, 2008. "Spinoff dynamics and the spatial formation of the fashion design industry, 1858-2005," Journal of Economic Geography, Oxford University Press, vol. 8(5), pages 593-614, September.
    50. Koen Frenken (ed.), 2007. "Applied Evolutionary Economics and Economic Geography," Books, Edward Elgar Publishing, number 4172, April.
    51. Iammarino, Simona & McCann, Philip, 2006. "The structure and evolution of industrial clusters: Transactions, technology and knowledge spillovers," Research Policy, Elsevier, vol. 35(7), pages 1018-1036, September.
    52. John Foster, 2005. "From simplistic to complex systems in economics," Cambridge Journal of Economics, Oxford University Press, vol. 29(6), pages 873-892, November.
    53. Breschi, Stefano & Lissoni, Francesco & Malerba, Franco, 2003. "Knowledge-relatedness in firm technological diversification," Research Policy, Elsevier, vol. 32(1), pages 69-87, January.
    54. Max-Peter Menzel & Dirk Fornahl, 2010. "Cluster life cycles--dimensions and rationales of cluster evolution," Industrial and Corporate Change, Oxford University Press, vol. 19(1), pages 205-238, February.
    55. Ann Markusen, 2003. "Fuzzy Concepts, Scanty Evidence, Policy Distance: The Case for Rigour and Policy Relevance in Critical Regional Studies," Regional Studies, Taylor & Francis Journals, vol. 37(6-7), pages 701-717.
    56. Koen Frenken & Frank Van Oort & Thijs Verburg, 2007. "Related Variety, Unrelated Variety and Regional Economic Growth," Regional Studies, Taylor & Francis Journals, vol. 41(5), pages 685-697.
    57. Klepper, Steven, 1997. "Industry Life Cycles," Industrial and Corporate Change, Oxford University Press, vol. 6(1), pages 145-181.
    58. Jan G. Lambooy & Ron A. Boschma, 2001. "Evolutionary economics and regional policy," The Annals of Regional Science, Springer;Western Regional Science Association, pages 113-131.
    59. Ron Boschma, 2009. "Evolutionary economic geography and its implications for regional innovation policy," Papers in Evolutionary Economic Geography (PEEG) 0912, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Sep 2009.
    60. Ron Boschma & Ron Martin, 2007. "Editorial: Constructing an evolutionary economic geography," Journal of Economic Geography, Oxford University Press, vol. 7(5), pages 537-548, September.
    61. Udo Staber, 1997. "An ecological perspective on entrepreneurship in industrial districts," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 9(1), pages 45-64, January.
    62. Steven Klepper, 2007. "Disagreements, Spinoffs, and the Evolution of Detroit as the Capital of the U.S. Automobile Industry," Management Science, INFORMS, vol. 53(4), pages 616-631, April.
    63. Peter Taylor & Rolee Aranya, 2008. "A Global 'Urban Roller Coaster'? Connectivity Changes in the World City Network, 2000-2004," Regional Studies, Taylor & Francis Journals, vol. 42(1), pages 1-16.
    64. Ron Martin & Peter Sunley, 2003. "Deconstructing clusters: chaotic concept or policy panacea?," Journal of Economic Geography, Oxford University Press, vol. 3(1), pages 5-35, January.
    65. Philip Mccann, 2007. "Observational Equivalence? Regional Studies and Regional Science," Regional Studies, Taylor & Francis Journals, vol. 41(9), pages 1209-1222.
    66. John Foster & Werner Hölzl (ed.), 2004. "Applied Evolutionary Economics and Complex Systems," Books, Edward Elgar Publishing, number 3061, April.
    67. Giovanni Dosi & Christopher Freeman & Richard Nelson & Gerarld Silverberg & Luc Soete (ed.), 1988. "Technical Change and Economic Theory," LEM Book Series, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy, number dosietal-1988, August.
    68. Peter Maskell & Anders Malmberg, 2007. "Myopia, knowledge development and cluster evolution," Journal of Economic Geography, Oxford University Press, vol. 7(5), pages 603-618, September.
    69. Edward L. Glaeser, 2005. "Reinventing Boston: 1630--2003," Journal of Economic Geography, Oxford University Press, vol. 5(2), pages 119-153, April.
    70. Jeffrey S. Boggs & Norma M. Rantisi, 2003. "The 'relational turn' in economic geography," Journal of Economic Geography, Oxford University Press, vol. 3(2), pages 109-116, April.
    71. Ron Boschma & Anne L. J. ter Wal, 2007. "Knowledge Networks and Innovative Performance in an Industrial District: The Case of a Footwear District in the South of Italy," Industry and Innovation, Taylor & Francis Journals, vol. 14(2), pages 177-199.
    72. Robert Hassink, 2005. "How to unlock regional economies from path dependency? From learning region to learning cluster," European Planning Studies, Taylor & Francis Journals, vol. 13(4), pages 521-535, June.
    73. Udo Staber, 2001. "The Structure of Networks in Industrial Districts," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 25(3), pages 537-552, September.
    74. Ron Boschma, 2005. "Proximity and Innovation: A Critical Assessment," Regional Studies, Taylor & Francis Journals, vol. 39(1), pages 61-74.
    75. Andre Torre & Alain Rallet, 2005. "Proximity and Localization," Regional Studies, Taylor & Francis Journals, vol. 39(1), pages 47-59.
    76. Geoffrey M. Hodgson, 2009. "Agency, Institutions, and Darwinism in Evolutionary Economic Geography," Economic Geography, Clark University, vol. 85(2), pages 167-173, April.
    77. Todtling, Franz & Trippl, Michaela, 2005. "One size fits all?: Towards a differentiated regional innovation policy approach," Research Policy, Elsevier, vol. 34(8), pages 1203-1219, October.
    78. Foster, John, 1997. "The analytical foundations of evolutionary economics: From biological analogy to economic self-organization," Structural Change and Economic Dynamics, Elsevier, vol. 8(4), pages 427-451, October.
    79. Jan G. Lambooy, 2002. "Knowledge and Urban Economic Development: An Evolutionary Perspective," Urban Studies, Urban Studies Journal Limited, vol. 39(5-6), pages 1019-1035, May.
    80. Kevin Morgan, 1997. "The Learning Region: Institutions, Innovation and Regional Renewal," Regional Studies, Taylor & Francis Journals, vol. 31(5), pages 491-503.
    81. Gernot Grabher, 2009. "Yet Another Turn? The Evolutionary Project in Economic Geography," Economic Geography, Clark University, vol. 85(2), pages 119-127, April.
    82. Ron Boschma, 2004. "Competitiveness of Regions from an Evolutionary Perspective," Regional Studies, Taylor & Francis Journals, vol. 38(9), pages 1001-1014.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    agglomeration economies; knowledge spillovers; labor mobility; plant performance; geographical proximity; related variety;

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:egu:wpaper:1004. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: http://edirc.repec.org/data/deguunl.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.