Externalities and the UK Regional Divide in Innovative Behaviour
This empirical paper investigates the impact of different sources of increasing returns on firm innovative behaviour in two regions of the UK in the period of the 1990s when the new economy is believed to have emerged. We pay particular attention to the impact of the intermediation in the form of the emergence of a market for specialised business services as a possible externality that influences regional innovation. Other influences on regional innovation such as knowledge spillovers due to public R&D in UK counties and dynamic economics to scale due to learning weithin a firm are also considered.
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