Knowledge spillovers and the equilibrium location of vertically linked industries: the return of the black hole
Using a generalised version of the Venables (1996) model, this paper explores the relative locations of two vertically linked sectors with knowledge spillovers. Analytical investigation shows that the dynamic properties of the Venables model are significantly affected by the presence of spillovers. In particular, the own-cost reduction effects at low transport costs can be so strong that runaway agglomeration phenomenon appears in a manner consistent with the “black hole” concept found in the literature. However, the assumption that because information decays over space means that these black hole dynamics are endogenous to the model and disappear when transport costs are high enough. Importantly, the location predictions obtained in simulations of the model are consistent with the empirical finding that industrials sector that benefit from spillovers are typically more agglomerated than sector that do not benefit from such spillovers.
(This abstract was borrowed from another version of this item.)
|Date of creation:||2008|
|Date of revision:|
|Contact details of provider:|| Postal: 69, quai d'Orsay - 75007 PARIS|
Phone: 01 44 18 54 00
Fax: 01 45 56 06 15
Web page: http://www.ofce.sciences-po.fr/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Audretsch, David B. & Feldman, Maryann P., 2004. "Knowledge spillovers and the geography of innovation," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 61, pages 2713-2739 Elsevier.
- Combes, Pierre-Philippe & Duranton, Gilles, 2001.
"Labour Pooling, Labour Poaching and Spatial Clustering,"
CEPR Discussion Papers
2975, C.E.P.R. Discussion Papers.
- Combes, Pierre-Philippe & Duranton, Gilles, 2006. "Labour pooling, labour poaching, and spatial clustering," Regional Science and Urban Economics, Elsevier, vol. 36(1), pages 1-28, January.
- Pierre-Philippe Combes & Gilles Duranton, 2001. "Labor Pooling, Labor Poaching and Spatial Clustering," CEP Discussion Papers dp0510, Centre for Economic Performance, LSE.
- Pierre-Philippe Combes & Gilles Duranton, 2001. "Labor pooling, labor poaching and spatial clustering," LSE Research Online Documents on Economics 20103, London School of Economics and Political Science, LSE Library.
- Pierre-Philippe Combes & Gilles Duranton, 2006. "Labor Pooling, Labor Poaching, and Spatial Clustering," Post-Print halshs-00754183, HAL.
- Hans Gersbach & Armin Schmutzler, 1999.
"Endogenous Spillovers and Incentives to Innovate,"
SOI - Working Papers
9902, Socioeconomic Institute - University of Zurich.
- Duranton, Gilles & Puga, Diego, 2003.
"Microfoundations of Urban Agglomeration Economies,"
CEPR Discussion Papers
4062, C.E.P.R. Discussion Papers.
- Duranton, Gilles & Puga, Diego, 2004. "Micro-foundations of urban agglomeration economies," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 48, pages 2063-2117 Elsevier.
- Giles Duranton & Diego Puga, 2003. "Micro-Foundations of Urban Agglomeration Economies," NBER Working Papers 9931, National Bureau of Economic Research, Inc.
- Masahisa Fujita & Paul Krugman & Anthony J. Venables, 2001. "The Spatial Economy: Cities, Regions, and International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262561476, June.
- Gersbach, Hans & Schmutzler, Armin, 1999. "External spillovers, internal spillovers and the geography of production and innovation," Regional Science and Urban Economics, Elsevier, vol. 29(6), pages 679-696, November.
- Venables, Anthony J, 1996.
"Equilibrium Locations of Vertically Linked Industries,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 37(2), pages 341-59, May.
- Anthony J. Venables, 1993. "Equilibrium Locations of Vertically Linked Industries," CEP Discussion Papers dp0137, Centre for Economic Performance, LSE.
- Venables, Anthony J, 1993. "Equilibrium Locations of Vertically Linked Industries," CEPR Discussion Papers 802, C.E.P.R. Discussion Papers.
- Frédéric Robert-Nicoud, 2005. "The structure of simple 'New Economic Geography' models (or, On identical twins)," Journal of Economic Geography, Oxford University Press, vol. 5(2), pages 201-234, April.
- Gianmarco I.P. Ottaviano & Frédéric Robert-Nicoud, 2006.
"The 'genome' of NEG models with vertical linkages: a positive and normative synthesis,"
Journal of Economic Geography,
Oxford University Press, vol. 6(2), pages 113-139, April.
- Ottaviano, Gianmarco & Robert-Nicoud, Frédéric, 2004. "The 'Genome' of NEG Models with Vertical Linkages: A Positive and Normative Synthesis," CEPR Discussion Papers 4600, C.E.P.R. Discussion Papers.
- Yasuko Ishiguro, 2005. "A consideration of the “no-black-hole” condition," The Annals of Regional Science, Springer, vol. 39(1), pages 25-34, 03.
- Acs, Zoltan J & Audretsch, David B, 1988. "Innovation in Large and Small Firms: An Empirical Analysis," American Economic Review, American Economic Association, vol. 78(4), pages 678-90, September.
- Corinne Autant-Bernard, 2001. "The Geography Of Knowledge Spillovers And Technological Proximity," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 10(4), pages 237-254.
When requesting a correction, please mention this item's handle: RePEc:fce:doctra:0805. 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: (Francesco Saraceno)
If references are entirely missing, you can add them using this form.