Showing papers in "Journal of Economic Geography in 2013"

Shaping the formation of university-industry research collaborations: what type of proximity does really matter?

Abstract: Research collaborations between universities and industry (U-I) are considered to be one important channel of potential localized knowledge spillovers (LKS). These collaborations favour both intended and unintended flows of knowledge and facilitate learning processes between partners from different organizations. Despite the copious literature on LKS, still little is known about the factors driving the formation of U-I research collaborations and, in particular, about the role that geographical proximity plays in the establishment of such relationships. Using collaborative research grants between universities and business firms awarded by the UK Engineering and Physical Sciences Research Council (EPSRC), in this article we disentangle some of the conditions under which different kinds of proximity contribute to the formation of U-I research collaborations, focussing in particular on clustering and technological complementarity among the firms participating in such partnerships.

Clusters, connectivity and catch-up: Bollywood and Bangalore in the Global Economy

Abstract: In this article, we make two important contributions to the literature on clusters. First, we provide a broader theory of cluster connectivity that has hitherto focused on organization-based pipelines and MNE subsidiaries, by including linkages in the form of personal relationships. Second, we use the lens of social network theory to derive a number of testable propositions. We propose that global linkages with decentralized network structures have the highest potential for local spillovers. In the emerging economy context, our theory implies that clusters linked to the global economy by decentralized pipelines have potential for in-depth catch-up, focused in industry and technology scope. In contrast, clusters linked through decentralized personal relationships have potential for in-breadth catch-up over a range of related industries and technologies. We illustrate our theoretical propositions by contrasting two emerging economy case studies: Bollywood, the Indian filmed entertainment cluster in Mumbai and the Indian software cluster in Bangalore.

A variety of capitalism … with Chinese characteristics?

Abstract: The ‘varieties of capitalism’ framework represents an influential methodological innovation in the field of comparative political economy. It seeks to account for enduring spatial variations in national economic performance by recourse to macroinstitutional analysis, drawing ideal-type distinctions between liberal market economies, modeled on USA, and coordinated market economies, modeled on Germany. Moving beyond critiques of varieties literature—for instance, its methodological nationalism; its preoccupation with limited, formal registers of (national) institutional variety; its growing reliance on rational-choice, firm-centric methods; its failure to account for the pronounced interpenetration and mutual dependence of capitalist economies and its tendency to privilege typological elaboration over causal explanation—this article explores the critical (counter?) case of Chinese capitalism. It considers the extent to which the Chinese economy can be meaningfully characterized as capitalist; the character of its state form and recent development path and its position within—or beyond—conventional understandings of capitalist variety.

Regional systems of entrepreneurship: the nexus of human capital, knowledge and new firm formation

Abstract: This article focuses on entrepreneurship in economic geography and aims at a systematic investigation of regional variation in knowledge-based entrepreneurial activity. We develop and test a three-phase structural model forregional systems of entrepreneurshipafter introducing a systems approach to entrepreneurship. The model is built upon the absorptive capacity theory of knowledge spillover entrepreneurship that identifies new knowledge as one source of entrepreneurial opportunities and human capital as the major source of entrepreneurial absorptive capacity. Based on data of US metropolitan areas, we find that entrepreneurial absorptive capacity is a critical driving force for knowledge-based entrepreneurial activity. We also find that high technology and cultural diversity contribute to the vibrancy of regional systems of entrepreneurship.

The dynamics of interfirm networks along the industry life cycle: The case of the global video game industry, 1987–2007

Abstract: In this article, we study the formation of network ties between firms along the life cycle of a creative industry. We focus on three mechanisms that drive network formation: (i) network endogeneity which stresses a path-dependent change originating from previous network structures, (ii) five forms of proximity (e.g. geographical proximity) which ascribe tie formation to the similarity of attributes of firms and (iii) individual characteristics which refer to the heterogeneity in the capabilities of firms to exploit external knowledge. The article employs a stochastic actor-oriented model to estimate the – changing – effects of these mechanisms on the formation of the interfirm network in the global video game industry from 1987 to 2007. Our findings indicate that, on average, the direction of the effects of the three mechanisms are stable over time, but that their weights change with the degree of maturity of the industry. To an increasing extent, video game firms tend to prefer to partner over short distances and with more cognitively similar firms as the industry evolves.

Spatially unbalanced growth in the British economy

Abstract: The financial crisis and consequential recession that brought the UK’s long economic boom of 1992–2008 to a dramatic end have generated considerable debate about the need to ‘rebalance’ the economy, both sectorally and spatially. In this article, we examine the scale and nature of imbalance in the British economy. We first examine the stylized facts of spatial economic imbalance, especially in relation to the recurring debate over the existence and persistence of a ‘North–South Divide’ in the nation’s economic landscape. We then review some theoretical accounts of unbalanced regional growth and the role they give to sectoral structure and competitiveness. Next, dynamic multi-factor partitioning methods are used to determine the relative contribution that sectoral composition has made to Britain’s North–South growth gap. In the light of our findings, we argue that the Coalition Government’s policies to redress that imbalance are unlikely to have any profound impact.

The impact of R&D offshoring on the home knowledge production of OECD investing regions

Abstract: This paper investigates the relationship between home and offshore R&D activities on the knowledge production of the investing home region. Debate is ongoing on whether R&D offshoring complements the R&D performed at home. In the light of increased offshoring of innovative activities to emerging countries, we explicitly focus on Brazil, Russia, India, China, Singapore and Taiwan. We suggest that complementarity should obtain, when home region and offshore R&D activities are dissimilar as well as when offshore R&D activities is about modular and less complex technologies. We ground our predictions on arguments related to geographical technological specialisation and reverse knowledge transfer from offshore locations to home regions within the more general open innovation trend. Using a theoretical framework based on the international business literature and the regional system of innovation perspective, we estimate a knowledge production function for a sample of 221 regions from 21 OECD countries with home region patent applications as the dependent variable. Our test supports our predictions on the complementarity between home region and offshore R&D. (This abstract was borrowed from another version of this item.)

Acquisition of European research funds and its effect on international scientific collaboration.

Abstract: The Framework Programmes (FPs) funded by the European Commission support transnational research collaborations in order to make the European Research Area more competitive. Some have raised concerns that the FPs compromise the cohesion policies of the European Commission aimed at reducing income disparities between European regions. We investigate whether existing scientific collaborations between European Union (EU) subnational regions-as captured by co-authored publications-are conducive for acquiring FP funding, and whether FP funding, in turn, stimulates subsequent co-publication activity between pairs of EU regions. Our results indicate that previous co-publication activity only has a minor effect on being funded. We also find that the effect of funding on co-publication activity is especially significant for regional pairs that did not intensively co-publish before participation. The results suggest that the returns to FP funding are highest when involving scientifically lagging regions. In this respect, the current FP policy is in line with cohesion policy.

Innovation and spatial inequality in Europe and USA

Abstract: Innovation is a crucial driver of urban and regional economic success. Innovative cities and regions tend to grow faster and have higher average wages. Little research, however, has considered the potential negative consequences: as a small body of innovators gain relative to others, innovation may lead to inequality. The evidence on this point is fragmented, based on cross-sectional evidence on skill premia rather than overall levels of inequality. This article provides the first comparative evidence on the link between innovation and inequality in a continental perspective. Using micro data from population surveys for European regions and US cities, the article finds, after controlling for other potential factors, good evidence of a link between innovation and inequality in European regions, but only limited evidence of such a relationship in USA. Less-flexible labour markets and lower levels of migration seem to be at the root of the stronger association between innovation and income inequality in Europe than in USA.

Go where the money is: modeling street robbers’ location choices

Abstract: This article analyzes how street robbers decide on where to attack their victims. Using data on nearly 13,000 robberies, on the approximately 18,000 offenders involved in these robberies, and on the nearly 25,000 census blocks in the city of Chicago, we utilize the discrete choice framework to assess which criteria motivate the location decisions of street robbers. We demonstrate that they attack near their own homes, on easily accessible blocks, where legal and illegal cash economies are present, and that these effects spill over to adjacent blocks. © The Author (2012). Published by Oxford University Press. All rights reserved.

Clustering and firm performance in project-based industries: the case of the global video game industry, 1972–2007

Abstract: Explanations of spatial clustering based on localization externalities are being questioned by recent empirical evidence showing that firms in clusters do not outperform firms outside clusters. We propose that these findings may be driven by the particularities of the industrial settings chosen in these studies. We argue that in project-based industries, negative localization externalities associated with competition grow proportionally with cluster size, while positive localization externalities increase more than proportionally with cluster size. By studying the survival patterns of 4607 firms and 1229 subsidiaries in the global video game industry, we find that the net effect of clustering becomes positive after a cluster reaches a critical size. We further unravel the subtleties of the video game industry by differentiating between exits by failure and exit by acquisition and conclude that being acquired is best considered as a sign of success rather than as a business failure.

Revealed competition for greenfield investments between European regions

Abstract: In the modern economy, cities are assumed to be in fierce competition over attracting foreign investments in leading sectors of the world economy. Despite the rich theoretical discourse on these 'wars', it remains unclear which territories are competing with each other over which types of investments Combining insights from international economics, international business, and urban systems literature, we develop an indicator to measure revealed competition between territories for investments based on the overlap of investment portfolios of regions. Taking competition for greenfield investments between European regions as a test subject, we identify competitive market segments, derive the competitive threat a region faces from other regions, the competitive threat regions pose to other regions, and the most important market segments in which regions compete. We show that European regions with similar locational endowments pose a fiercer competitive thre at to one another. In addition, regions that are sufficiently large and distinctive, face the smallest average competitive threat from all other regions.

The landscape of conflict: IDPs, aid and land-use change in Darfur

Abstract: This article examines spatial changes in production in the presence of civil conflict. A simple model predicts land abandonment which increases with proximity to insecurity, and welfare losses to rural land owners. The model also predicts that food aid can buffer the land-use change impacts generated by war. Spatial data on land use, violent events, displaced populations and aid from 2001-2007 corroborate these predictions in Darfur, Sudan. The results suggest large disruptions in short-term production, with abandonment of agriculture far from the cities, and intensification of land use on their periphery. Language: en

Human capital externalities and employment differences across metropolitan areas of the USA

Abstract: It has been well documented that employment outcomes often differ considerably across areas. This paper examines the extent to which the local human capital level, measured as the share of adults with a college degree, has positive external effects on labor force participation and employment for U.S. metropolitan area residents. We find that the local human capital level has positive externalities on participation for women, but an inconsistent effect on participation for men. However, the local human capital level reduces unemployment for both men and women. We also find that less educated workers generally receive the largest external benefits.

Cultural heritage and the location choice of Dutch households in a residential sorting model

Abstract: Recent research has stressed the role of consumer amenities for urban development. In this article, we investigate the impact of cultural heritage on the attractiveness of cities by analyzing the location choice of households. We develop and estimate a residential sorting model that allows us to compute the marginal willingness to pay for cultural heritage as well as other urban amenities. Since the attractiveness of residential locations may be affected by amenities of other nearby locations as well, we extend the model to incorporate these effects, using spatial econometric techniques. Our model accounts for unobserved amenities, heterogeneity of preferences among households and spatial correlation between observed and unobserved amenities. The results confirm that cultural heritage has a substantial impact on the attractiveness of cities. © The Author (2012). Published by Oxford University Press. All rights reserved.

How polycentric is a monocentric city? Centers, spillovers and hysteresis

Abstract: We assess the extent to which firms in an environment of decreasing transport costs and industrial transformation value the benefits of proximity to a historic CBD and agglomeration economies in their location decisions. Taking a hybrid perspective of classical bid-rent theory and a world where clustering of economic activity is driven by between-firm spillovers, Berlin, Germany, from 1890 to 1936 serves as a case in point. Our results suggest that the average productivity effect of a doubling of between- firm spillovers over the study period increases from 3.5% to 8.3%. As the city transforms into a service-based economy, several micro agglomerations emerge. Their locations close to the CBD still make the city look roughly monocentric. This is in line with a hysteresis effect in which second-nature geography drives the ongoing strength of a historic city center even though the importance of the originally relevant first-nature geography has vanished.

Securitization across borders:Organizational mimicry in Islamic finance

Abstract: This article discusses the case of securitization in Islamic finance to tease out what is universal and what is specific about this technique. To do this, the article frames the spatial dispersal of securitization as a form of ‘organizational mimicry’, which highlights that techniques always rely for their functioning on locally rooted ‘cultures of practice’, suggesting that successful transplantations require adaptation in both context and technique. This article adds to the prevalent literature on mimicry a geographical perspective by investigating to what extent this double shift can also be traced in the geo-historical dispersal of securitization in Islamic markets.

Is agglomeration taxable

Abstract: Several theoretical papers that examine tax competition with agglomeration effects have stressed the possibility that the governments of jurisdictions in which economic activity is concentrated may tax firms more heavily (taxable agglomeration rents). In this paper, we examine the tax rate setting decisions taken with regard to the Spanish municipal business tax (Impuesto sobre Actividades Economicas). The analysis, carried out with a sample of 2,772 municipalities, focuses on the effect that urbanization economies, localization economies and the market potential of municipalities have on their business tax rates. High urbanization economies and high localization economies are found to increase the business tax rate. Although the evidence is weaker, the results also indicate that municipalities with better access to demand (of consumers) set higher tax rates.

Revisiting the US food retail consolidation wave: regulation, market power and spatial outcomes

Abstract: This paper revisits Neil Wrigley’s influential research that explored the corporate restructuring of the US food retail sector, which was characterised by a focus on the spatial implications of merger activity, market concentration and competition regulation. It assesses the importance of this scholarship in a contemporary context, tracking these competitive and regulatory trends from a decade ago to the present. This is of particular interest given the continued concentration of market power and related competitive shake-out; the innovative experimentation with new store formats; anti-trust rulings concerning market definition by the Federal Trade Commission (FTC); and the challenges faced by European entrants to the market.

Neurocapitalism and the new neuros: using neuroeconomics, behavioural economics and picoeconomics for public policy

Abstract: Neuroeconomics, behavioural economics and picoeconomics have recently come to widespread popular attention, informing both public policy and commercial applications in UK and USA in particular. From neuroeducation and neuromarketing to so-called ‘nudge’-inspired public policies, the resurgence of broadly behavioural accounts of economic theory has far-reaching consequences for how we both understand and intervene in human rationality. While economic geographers have long been engaged with behavioural concerns, the economic foundations of more recent ‘behaviour change’ initiatives remain to be fully interrogated. This article provides a critical review of these developments in economics and outlines concerns posed for a geographical analysis of new economic knowledges, methods and subjects.

Identity creation and cluster construction: the case of the Paso Robles wine region

Abstract: Through a study of a newly recognized wine production cluster in Paso Robles, CA, this article demonstrates that in addition to the commonly accepted features of an industrial cluster, such as suppliers, skilled labor and local knowledge sharing, a hitherto largely ignored feature is identity, which, while a socially emergent feature, has economic value. The wine industry is particularly suited as an ideal type because the cluster is legally strictly circumscribed. We demonstrate how cluster identity formation is the result of internal developments and external validation. In culture goods industries such as wine, identity performs a crucial role in the cluster’s development and success, but we suggest that this can be extended to other industrial clusters that have successfully created an identity.

Coagglomeration of Formal and Informal Industry : Evidence from India

Abstract: A large and growing informal sector is a major feature of developing countries. This paper analyzes coagglomeration patterns between formal and informal manufacturing enterprises in India. It studies (a) the causes underlying these patterns and (b) the positive externalities, if any, on the entry of new firms. The analysis finds that buyer-supplier and technology linkages explain much of formal-informal coagglomeration. Also, within-industry coagglomeration matters mostly to small- and medium-sized formal firm births. Traditional measures of agglomeration remain important in explaining new industrial activity, whether in the formal or the informal sector.

The scope of financial institutions: in-sourcing, outsourcing and off-shoring

Abstract: In recent years, the standard theory of the integrated firm has given way to a concern about the relative advantages of in-sourcing over outsourcing, recognizing that the scope of the firm is a strategic matter. The issue of in-sourcing versus outsourcing has been accompanied by a concern about the geographical scope of the firm: whether the outsourcing of tasks and functions is close-at-hand or offshore. In this article, we begin with reference to Coase and the literature that has followed in his wake suggesting a crucial and unrecognized issue in his conceptualization is the problematic question of who has authority to make decisions (governance). We suggest a way of conceptualizing the tasks and functions of firms which rely upon firm-specific strategic assets including human capital, governance and decision-making procedures, and the information systems that underpin decision making. The objects of our analysis are financial institutions such as mutual funds, pension funds, sovereign wealth funds and investment management companies. To the extent that the cost of services is important, these types of financial institutions have sought to discount costs by outsourcing, even off-shoring. At issue is the viable geographical reach of this type of institution noting the various ways contemporary institutions (small and large) have sought to deal with this issue. Our analysis is conceptual and theoretical rather than empirical and is based on a set of case studies and fieldwork and the implications to be drawn thereof.

Local Industrial Structures and Female Entrepreneurship in India

Abstract: We analyze the spatial determinants of female entrepreneurship in India in the manufacturing and services sectors. We focus on the presence of incumbent femaleowned businesses and their role in promoting higher subsequent female entrepreneurship relative to male entrepreneurship. We find evidence of agglomeration economies in both sectors, where higher female ownership among incumbent businesses within a district-industry predicts that a greater share of subsequent entrepreneurs will be female. Moreover, higher female ownership of local businesses in related industries (e.g. those sharing similar labor needs and industries related via input–output markets) predict greater relative female entry rates even after controlling for the focal district-industry’s conditions. The core patterns hold when using local industrial conditions in 1994 to instrument for incumbent conditions in 2000 and 2005. The results highlight that the traits of business owners in incumbent industrial structures influence the types of entrepreneurs supported.