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How to jump further? Path dependent and path breaking in an uneven industry space

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  • Shengjun Zhu
  • Canfei He
  • Yi Zhou

Abstract

By using the proximity product index, recent studies have argued that regional diversification emerged as a path-dependent process, as regions often branch into industries that are related to preexisting industrial structure. It is also claimed that developed countries that start from the core, dense areas in the uneven industry space have more opportunities to jump to new related industries and therefore have more opportunities to sustain economic growth than do developing countries that jump from peripheral, deserted areas. In this paper, we differentiate two types of regional diversification—path-dependent and path-breaking—and ask questions from a different angle: can developing countries/regions jump further in the industry space to break path-dependent development trajectories and more importantly to catch up with developed ones? Based on China’s export data, this paper shows that regions can jump further by investing in extra-regional linkages and internal innovation. Not only do these two sets of factors promote regions’ jumping capability, but they also contribute to regions’ capability of maintaining a comparative advantage in technologically distant and less related industries. In addition, different extra-regional linkage and internal innovation factors have affected regional diversification to different extents, and these effects also vary across regions and industries. Empirically, this research seeks to find a more promising future for developing countries/regions. Theoretically, our research testifies some key findings of theoretical works in evolutionary economic geography by using a quantitative framework. In addition, this paper includes some economic and institutional factors that have been left out in previous studies.

Suggested Citation

  • Shengjun Zhu & Canfei He & Yi Zhou, 2015. "How to jump further? Path dependent and path breaking in an uneven industry space," Papers in Evolutionary Economic Geography (PEEG) 1524, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Jul 2015.
  • Handle: RePEc:egu:wpaper:1524
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    File URL: http://econ.geo.uu.nl/peeg/peeg1524.pdf
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    References listed on IDEAS

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    Cited by:

    1. Adam Whittle, 2017. "Local and Non-Local Knowledge Typologies: Technological Complexity in the Irish Knowledge Space," Papers in Evolutionary Economic Geography (PEEG) 1728, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Nov 2017.

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    Keywords

    path-dependent; path-breaking; industrial relatedness; proximity index; transition industries;

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