The Analysis Of Location, Co-Location And Urbanisation Economies
This paper provides an overview and critical assessment of co-location and clustering in space. Basic location conditions include accessibility to customers, input suppliers including knowledge providers, and regional endowments. A distinction is made between slow and fast location adjustments. In a basic model, it is shown how distance sensitivity and scale economies generate self-reinforcing location externalities. Variations of the same model are employed to illuminate how urbanisation economies can stimulate co-location and clustering. One model variant is designed to examine how innovation activities also can be influenced by urbanisation economies. The paper concludes that a set of basic principals form the basis for localisation and urbanisation economies. However, there remains a challenging gap between model predictions and empirical observations.
|Date of creation:||31 May 2006|
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