IDEAS home Printed from https://ideas.repec.org/p/imd/wpaper/wp2008-09.html
   My bibliography  Save this paper

Mountains in a flat world: Why proximity still matters for the location of economic activity

Author

Listed:
  • Andrés Rodríguez-Pose

    () (London School of Economics)

  • Riccardo Crescenzi

    () (European University Institute)

Abstract

Thomas Friedman (2005) argues that the expansion of trade, the internationalization of firms, the galloping process of outsourcing, and the possibility of networking is creating a 'flat world': a level playing field where individuals are empowered and better off. This paper challenges this view of the world by arguing that not all territories have the same capacity to maximize the benefits and opportunities and minimize the risks linked to globalization. Numerous forces are coalescing in order to provoke the emergence of urban 'mountains' where wealth, economic activity, and innovative capacity agglomerate. The interactions of these forces in the close geographical proximity of large urban areas give shape to a much more complex geography of the world economy.

Suggested Citation

  • Andrés Rodríguez-Pose & Riccardo Crescenzi, 2008. "Mountains in a flat world: Why proximity still matters for the location of economic activity," Working Papers 2008-09, Instituto Madrileño de Estudios Avanzados (IMDEA) Ciencias Sociales.
  • Handle: RePEc:imd:wpaper:wp2008-09
    as

    Download full text from publisher

    File URL: http://repec.imdea.org/pdf/imdea-wp2008-09.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. P Healey, 1998. "Building institutional capacity through collaborative approaches to urban planning," Environment and Planning A, Pion Ltd, London, vol. 30(9), pages 1531-1546, September.
    3. Zak, Paul J & Knack, Stephen, 2001. "Trust and Growth," Economic Journal, Royal Economic Society, vol. 111(470), pages 295-321, April.
    4. James R. Faulconbridge, 2006. "Stretching tacit knowledge beyond a local fix? Global spaces of learning in advertising professional service firms," Journal of Economic Geography, Oxford University Press, vol. 6(4), pages 517-540, August.
    5. Gerald A. Carlino & Satyajit Chatterjee & Robert M. Hunt, 2001. "Knowledge spillovers and the new economy of cities," Working Papers 01-14, Federal Reserve Bank of Philadelphia.
    6. Gene M. Grossman & Elhanan Helpman, 1994. "Endogenous Innovation in the Theory of Growth," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 23-44, Winter.
    7. T. Paul Schultz, 1998. "Inequality in the distribution of personal income in the world: How it is changing and why," Journal of Population Economics, Springer;European Society for Population Economics, vol. 11(3), pages 307-344.
    8. Stephen Knack & Philip Keefer, 1997. "Does Social Capital Have an Economic Payoff? A Cross-Country Investigation," The Quarterly Journal of Economics, Oxford University Press, vol. 112(4), pages 1251-1288.
    9. Birgitte Gregersen & Bjorn Johnson, 1997. "Learning Economies, Innovation Systems and European Integration," Regional Studies, Taylor & Francis Journals, vol. 31(5), pages 479-490.
    10. Adam B. Jaffe & Manuel Trajtenberg & Rebecca Henderson, 1993. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," The Quarterly Journal of Economics, Oxford University Press, vol. 108(3), pages 577-598.
    11. A. Rodriguez-Pose & Riccardo Crescenzi, 2006. "R&D, spillovers, innovatoin systems and the genesis of regional growth in Europe," Departmental Working Papers of Economics - University 'Roma Tre' 0067, Department of Economics - University Roma Tre.
    12. Puga, Diego, 1999. "The rise and fall of regional inequalities," European Economic Review, Elsevier, vol. 43(2), pages 303-334, February.
    13. Danny Quah, 1999. "The Weightless Economy in Economic Development," CEP Discussion Papers dp0417, Centre for Economic Performance, LSE.
    14. Rosina Moreno & Raffaele Paci & Stefano Usai, 2005. "Spatial spillovers and innovation activity in European regions," Environment and Planning A, Pion Ltd, London, vol. 37(10), pages 1793-1812, October.
    15. Duranton, Gilles & Puga, Diego, 2005. "From sectoral to functional urban specialisation," Journal of Urban Economics, Elsevier, vol. 57(2), pages 343-370, March.
    16. Cooke, Philip & Gomez Uranga, Mikel & Etxebarria, Goio, 1997. "Regional innovation systems: Institutional and organisational dimensions," Research Policy, Elsevier, vol. 26(4-5), pages 475-491, December.
    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. Elisenda Paluzie Hernandez, 1999. "Trade policy and regional inequalities," Working Papers in Economics 48, Universitat de Barcelona. Espai de Recerca en Economia.
    19. Peter Taylor & Michael Hoyler, 2000. "The spatial order of European cities under conditions of contemporary globalisation," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 91(2), pages 176-189, May.
    20. Rebelo, Sergio, 1991. "Long-Run Policy Analysis and Long-Run Growth," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 500-521, June.
    21. Gilles Duranton & Diego Puga, 2001. "Nursery Cities: Urban Diversity, Process Innovation, and the Life Cycle of Products," American Economic Review, American Economic Association, vol. 91(5), pages 1454-1477, December.
    22. Bjørn Asheim & Lars Coenen, 2006. "Contextualising Regional Innovation Systems in a Globalising Learning Economy: On Knowledge Bases and Institutional Frameworks," The Journal of Technology Transfer, Springer, vol. 31(1), pages 163-173, January.
    23. Riccardo Crescenzi & Andrés Rodriguez-Pose & Michael Storper, 2007. "The territorial dynamics of innovation: a Europe-United States comparative analysis," Journal of Economic Geography, Oxford University Press, vol. 7(6), pages 673-709, November.
    24. Quah, Danny, 1997. "Empirics for Growth and Distribution: Stratification, Polarization, and Convergence Clubs," CEPR Discussion Papers 1586, C.E.P.R. Discussion Papers.
    25. Anselin, Luc & Varga, Attila & Acs, Zoltan, 1997. "Local Geographic Spillovers between University Research and High Technology Innovations," Journal of Urban Economics, Elsevier, vol. 42(3), pages 422-448, November.
    26. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    27. 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.
    28. 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.
    29. Michael Storper & Anthony J. Venables, 2004. "Buzz: face-to-face contact and the urban economy," Journal of Economic Geography, Oxford University Press, vol. 4(4), pages 351-370, August.
    30. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2004. "The Role of Social Capital in Financial Development," American Economic Review, American Economic Association, vol. 94(3), pages 526-556, June.
    31. Harald Bathelt, 2001. "Regional competence and economic recovery: divergent growth paths in Boston's high technology economy," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 13(4), pages 287-314, October.
    32. Charles I. Jones, 1997. "On the Evolution of the World Income Distribution," Journal of Economic Perspectives, American Economic Association, vol. 11(3), pages 19-36, Summer.
    33. Quah, D., 1999. "The Weightless Economy in Economic Development," Research Paper 155, World Institute for Development Economics Research.
    34. Allen J. Scott, 2001. "Globalization and the Rise of City-regions," European Planning Studies, Taylor & Francis Journals, vol. 9(7), pages 813-826, October.
    35. Edward E Leamer & Michael Storper, 2001. "The Economic Geography of the Internet Age," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 32(4), pages 641-665, December.
    36. Attila Varga, 2000. "Local Academic Knowledge Transfers and the Concentration of Economic Activity," Journal of Regional Science, Wiley Blackwell, vol. 40(2), pages 289-309.
    37. Xavier Sala-i-Martin, 2006. "The World Distribution of Income: Falling Poverty and … Convergence, Period," The Quarterly Journal of Economics, Oxford University Press, vol. 121(2), pages 351-397.
    38. Wade, Robert Hunter, 2004. "Is Globalization Reducing Poverty and Inequality?," World Development, Elsevier, vol. 32(4), pages 567-589, April.
    39. Quah, Danny, 1999. "The weightless economy in economic development," LSE Research Online Documents on Economics 2291, London School of Economics and Political Science, LSE Library.
    40. Meric S. Gertler, 2003. "Tacit knowledge and the economic geography of context, or The undefinable tacitness of being (there)," Journal of Economic Geography, Oxford University Press, vol. 3(1), pages 75-99, January.
    41. Roland Andersson & John M. Quigley & Mats Wilhelmsson, 2005. "Agglomeration and the spatial distribution of creativity," Papers in Regional Science, Wiley Blackwell, vol. 84(3), pages 445-464, August.
    42. Dosi, Giovanni, 1988. "Sources, Procedures, and Microeconomic Effects of Innovation," Journal of Economic Literature, American Economic Association, vol. 26(3), pages 1120-1171, September.
    43. Rodriguez-Pose, Andres, 1998. "Dynamics of Regional Growth in Europe: Social and Political Factors," OUP Catalogue, Oxford University Press, number 9780198233831.
    44. Scherer, F. M., 1983. "The propensity to patent," International Journal of Industrial Organization, Elsevier, vol. 1(1), pages 107-128, March.
    45. Vernon Henderson, 1999. "Marshall's Economies," NBER Working Papers 7358, National Bureau of Economic Research, Inc.
    46. Andres Rodriguez-Pose & Michael Storper, 2006. "Better Rules or Stronger Communities? On the Social Foundations of Institutional Change and Its Economic Effects," Sciences Po publications info:hdl:2441/f0uohitsgqh, Sciences Po.
    47. Bart Verspagen, 1997. "Measuring Intersectoral Technology Spillovers: Estimates from the European and US Patent Office Databases," Economic Systems Research, Taylor & Francis Journals, vol. 9(1), pages 47-65.
    48. Rodriguez-Pose, Andres & Gill, Nicholas, 2006. "How does trade affect regional disparities?," World Development, Elsevier, vol. 34(7), pages 1201-1222, July.
    49. P Healey, 1998. "Building Institutional Capacity through Collaborative Approaches to Urban Planning," Environment and Planning A, , vol. 30(9), pages 1531-1546, September.
    50. Ron Boschma, 2005. "Proximity and Innovation: A Critical Assessment," Regional Studies, Taylor & Francis Journals, vol. 39(1), pages 61-74.
    51. Harald Bathelt & Andersand Malmberg & Peter Maskell, 2002. "Clusters and Knowledge Local Buzz, Global Pipelines and the Process of Knowledge Creation," DRUID Working Papers 02-12, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    52. Kevin Morgan, 2004. "The exaggerated death of geography: learning, proximity and territorial innovation systems," Journal of Economic Geography, Oxford University Press, vol. 4(1), pages 3-21, January.
    53. Kevin Morgan, 1997. "The Learning Region: Institutions, Innovation and Regional Renewal," Regional Studies, Taylor & Francis Journals, vol. 31(5), pages 491-503.
    54. Steve Dowrick & Muhammad Akmal, 2005. "Contradictory Trends In Global Income Inequality: A Tale Of Two Biases," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 51(2), pages 201-229, June.
    55. Sjoerd Beugelsdijk & Henri L.F. de Groot & Anton B.T.M. van Schaik, 2004. "Trust and economic growth: a robustness analysis," Oxford Economic Papers, Oxford University Press, vol. 56(1), pages 118-134, January.
    56. Attila Varga, 1998. "Local academic knowledge spillovers and the concentration of economic activity," ERSA conference papers ersa98p493, European Regional Science Association.
    57. Paul M. Romer, 1994. "The Origins of Endogenous Growth," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 3-22, Winter.
    Full references (including those not matched with items on IDEAS)

    More about this item

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

    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:imd:wpaper:wp2008-09. 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: (IMDEA RePEc Maintainer). General contact details of provider: http://edirc.repec.org/data/icimdes.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.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with 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.