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Explaining the dynamics of relatedness: the role of co-location and complexity

Author

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  • Sándor Juhasz
  • Tom Broekel
  • Ron Boschma

Abstract

Relatedness has become a key concept for studying the diversification of firms, regions, and countries. However, studies tend to treat relatedness as being time-invariant or, alternatively, consider its evolution as exogenously given. This study argues that relatedness is inherently dynamic and endogenous to technological and economic developments. Using patent data, we test the extent to which relatedness between technologies developed along co-location and differences in technological complexity in the period 1980-2010. Our results show that co-located technologies are more likely to become related over time. Moreover, our results suggest that co-location and complexity of technologies are conducive to the intensification of relatedness over time.

Suggested Citation

  • Sándor Juhasz & Tom Broekel & Ron Boschma, 2020. "Explaining the dynamics of relatedness: the role of co-location and complexity," Papers in Evolutionary Economic Geography (PEEG) 2032, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Aug 2020.
    • Handle: RePEc:egu:wpaper:2032
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    File URL: http://econ.geo.uu.nl/peeg/peeg2032.pdf
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    Cited by:

    1. Lukas Mueller & Timothy Peter Marcroft & Constantin von Beck & Jan Pedro Zeiss & Valeria Jana Schwanitz & August Wierling & Lars Holstenkamp, 2024. "“First come, first served" or “the more, the merrier"? Organizational dynamics of citizen-led solar initiatives and the presence of photovoltaic installations in Germany," Post-Print hal-05123966, HAL.
    2. Bathelt, Harald & Storper, Michael, 2023. "Related variety and regional development: a critique," LSE Research Online Documents on Economics 120162, London School of Economics and Political Science, LSE Library.
    3. Quinten De Wettinck & Karolien De Bruyne & Wouter Bam & C'esar A. Hidalgo, 2025. "Economic Complexity Alignment and Sustainable Development," Papers 2509.17919, arXiv.org, revised Sep 2025.
    4. Valeriy Anatolievich Kryukov & Vladimir Vitalievich Shmat, 2022. "Asian Russia – Conditions for and Obstacles to Progressive Diversification of Macroregional Economy," Spatial Economics=Prostranstvennaya Ekonomika, Economic Research Institute, Far Eastern Branch, Russian Academy of Sciences (Khabarovsk, Russia), issue 1, pages 34-72.
    5. Harald Bathelt & Michael Storper, 2022. "Related Variety and Regional Development," Papers in Evolutionary Economic Geography (PEEG) 2214, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Aug 2022.
    6. Hidalgo, César & Stojkoski, Viktor, 2025. "The Theory of Economic Complexity," TSE Working Papers 1648, Toulouse School of Economics (TSE), revised Aug 2025.
    7. Leonardo Mazzoni & Niccolò Innocenti, 2024. "What conditions favor high-potential entrepreneurship? Unpacking the nexus between the industrial structure and startup typologies," Small Business Economics, Springer, vol. 62(3), pages 1201-1222, March.
    8. Tom Broekel & Louis Knuepling & Lars Mewes, 2023. "Boosting, sorting and complexity—urban scaling of innovation around the world," Journal of Economic Geography, Oxford University Press, vol. 23(5), pages 979-1016.
    9. Milad Abbasiharofteh & Amir Maghssudipour, 2024. "Driving Forces Behind Relational Knowledge Sourcing in Clusters: Single- and Multilevel Approaches," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(4), pages 15761-15787, December.
    10. Balland, Pierre-Alexandre & Broekel, Tom & Diodato, Dario & Giuliani, Elisa & Hausmann, Ricardo & O'Clery, Neave & Rigby, David, 2022. "Reprint of The new paradigm of economic complexity," Research Policy, Elsevier, vol. 51(8).
    11. İbrahim Tuğrul Çınar, 2023. "Regional development trap in Turkey: Can relatedness find a way out?," Papers in Regional Science, Wiley Blackwell, vol. 102(4), pages 817-850, August.
    12. Jason Deegan & Tom Broekel & Silje Haus-Reve & Rune Dahl Fitjar, 2024. "How regions diversify into new jobs: from related industries or related occupations?," Regional Studies, Taylor & Francis Journals, vol. 58(11), pages 1965-1980, November.

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    Keywords

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    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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