Journal of Economic Geography - recent issues

Mobility of skilled workers and co-invention networks: an anatomy of localized knowledge flows

Breschi, S., Lissoni, F. — 2009-06-17

This article illustrates the contribution of mobile inventors and networks of inventors to the diffusion of knowledge across firms and within cities or states. It is based upon an original data set on US inventors’ patent applications at the European Patent Office, in the fields of drugs, biotechnology and organic chemistry. The study combines the methodology originally proposed by Jaffe et al. (1993, Quarterly Journal of Economics, 108: 577–598) with tools from social network analysis, in order to evaluate extent of the localization of knowledge flows, as measured by patent citations. After controlling for inventors’ mobility and for the resulting co-invention network, the residual effect of spatial proximity on knowledge diffusion is found to be greatly reduced. We argue that the most fundamental reason why geography matters in constraining the diffusion of knowledge is that mobile researchers are not likely to relocate in space, so that their co-invention network is also localized. In the light of these results, we revisit common interpretations of localized knowledge flows as externalities.

The emerging market for intellectual property: drivers, restrainers, and implications

Monk, A. H. B. — 2009-06-17

The rise of the knowledge economy has ushered in important changes to the economic landscape. One such change is the emergence of a market for intellectual property (IP), and more specifically a market in patents. New corporate IP strategies are driving the development of this IP market; specialized patent intermediaries, located predominantly in Silicon Valley, are facilitating its growth. Given the relevance of this phenomenon for economic geography, this article seeks to map this emerging market and illustrate its drivers, restrainers and implications. Despite its infancy, the patent market is drawing comparisons to the market for financial derivatives. It has the potential to change the economic landscape in a way that permanently alters corporate and regional competitive dynamics.

Life on the edge: navigating the competitive tensions between the 'social' and the 'economic' in the social economy and in its relations to the mainstream

Hudson, R. — 2009-06-17

Drawing on detailed empirical research in the UK, in this article I explore the motivations that lie behind the formation of social economy organisations (SEOs) and the multiple trajectories that these can then follow and the tensions to which this can give rise as the ‘social’ runs up against the ‘economic’. This can, and often does, involve competition between SEOs in limited local markets and in search of state grant income. For those that seek to transcend these limits, the tensions between the ‘economic’ and the ‘social’ can become acute, especially in those that seek to become self-consciously near-market social ‘enterprises’, with a growing focus upon their economic role and contribution and trading as the route to growth. This typically leads them into competition with firms in the mainstream capitalist economy, engendering tensions between the need to survive in competitive markets and the ethical and social motivations that informed their original formation. I then consider broader questions as to imaginaries about the social economy and of how the social economy is seen in the policy and academic literatures in terms of its socio-economic role. Finally, I offer some reflective comments as to the future for SEOs and the social economy and their contribution to social and economic life.

Financing internationalisation: a case study of an African retail transnational corporation

Okeahalam, C. C., Wood, S. — 2009-06-17

Economic geographers are directing increasing attention to international expansion by leading retail transnational corporations (TNCs). However, there has been minimal examination of the financing methods of these firms and, while the major retail TNCs have supply relationships in sub-Saharan Africa, so far none have opened stores on the continent. Therefore, in this article we analyse expansion into sub-Saharan Africa by a second tier retail TNC (Shoprite) and explore its financing strategy. We find that the food retail sector in sub-Saharan Africa is experiencing strong growth with high financial returns. We identify a pecking order to financing the firm—with a preference for internal funding through retained earnings preceding long-term debt, and limited issuance of equity as a last resort. Given the efficiencies of debt financing, this preference is interpreted as reluctance to dilute returns to shareholders and as a pragmatic approach to financing expansion in ‘particularistic’ business environments.

Plants' self-selection, agglomeration economies and regional productivity in Chile

Saito, H., Gopinath, M. — 2009-06-17

In this study, we assess the relative contribution of plants’ self-selection and agglomeration economies to a region's productivity level. We focus on manufacturing plants by region in the Chilean food industry, which is not only a major source of employment and exports but also spatially dispersed. Our estimation of plant-level productivity corrects for possible simultaneity between productivity and conventional inputs and plants’ self-selection to locate in specific markets. Moreover, we account for three sources of externalities: localization, urbanization and demand-driven scale economies in our estimation. Then, a censored regression model relates regional productivity-distribution measures to agglomeration economies. We find that high-productivity (exporting) plants locate in a region where other plants in food industry agglomerate, industrial structure is diversified and market size is large. Our results suggest that plants’ self-selection outweighs the contribution of agglomeration economies in increasing a region's productivity level.

Why an economic core: domestic transport costs

Ramcharan, R. — 2009-06-17

What determines the spatial distribution of economic activity? And why is economic activity sometimes ‘lumpy’, distributed in a core-periphery pattern in some countries? This article uses new subregional data on the spatial distribution of economic activity for a large cross section of countries, as well as information on roads, rails and surface topography to help understand the role of domestic transport costs in shaping economic geography. The evidence suggests a significant role for physical geography and transport costs in determining the location of economic activity. Countries with rougher surfaces have less developed road and rail transport networks, and greater spatial concentration of economic activity.

World Development Report 2009: reshaping economic geography

Scott, A. J. — 2009-06-17

Economic development and the geography of institutions

Bosker, M., Garretsen, H. — 2009-04-17

To explain cross-country income differences, research has recently focused on the so-called deep determinants of economic development, notably institutions and geography. This article shows that it is not only absolute geography, in terms of for instance climate or being landlocked, but also relative geography, the spatial linkages between countries, that matters for a country's GDP per capita. More specifically, we analyze the importance of the geography of institutions. We show that apart from its own institutions, the institutional quality in neighboring countries is also important for a country's economic development. This finding is robust to various alternative specifications of relative geography, sample size and the inclusion of additional controls.

Evolving economic landscapes: why new institutional economics matters for economic geography

Rafiqui, P. S. — 2009-04-17

As institutional change is an integral part of economic development, institutionalism ought not to be left behind in favour of an evolutionary economic geography despite the attention the ‘evolutionary turn’ has recently received. Rather, we need to re-address our treatment of institutions within the analysis of evolutionary economic landscapes. This paper engages a new institutional economics (NIE) conceptualization that draws on cognitive sciences instead of Darwinism when investigating processes by which institutions and economies change. It finds that NIE offers a useful definition of institutions as well as existing analytical frameworks, both capable of informing our view of the economy as an evolving system in which place and space matter.

Varieties of neoliberalism? Restructuring in large industrially dependent regions across Western and Eastern Europe

Birch, K., Mykhnenko, V. — 2009-04-17

The recent travails of the European Constitution, now Reform Treaty, illustrate the divergence of views on European integration. To many commentators and academics, European integration has come to represent the establishment of a neoliberal Europe characterized by a ‘negative’ form of integration. This neoliberalization of European economies has been underpinned by the perceived threat of globalization and global competition leading to the wholesale restructuring of European economies over the past three decades. However, this article does not assume that globalization and neoliberal integration have homogenization effects; rather, it argues that neoliberalization as a process has produced varieties of neoliberalism across Europe and not one hegemonic form of capitalism. To make this argument, the article focuses on the rationale behind neoliberal policies in different European countries, the specific strategies these countries have pursued and the impacts that these strategies have had on employment and growth in large industrially dependent regions.

Why do some places succeed when others decline? A social interaction model of cluster viability

Suire, R., Vicente, J. — 2009-04-17

One of the most convincing explanations papers generally provide concerning clusters in knowledge-based economies refers to the geographically bounded dimension of knowledge spillovers. Here, we shall underline that location decision externalities precede local knowledge spillovers in the explanation of cluster aggregate efficiency, which thus requires us to focus on the sequential process of location and the nature of interdependences in location decision-making. To that end, we mean to associate cluster emergence with the formation of locational norms, and to study the critical parameters of their stability. These parameters relate to the type of decision externalities among more or less cognitively distant firms, which influences the weight and the resulting ambivalent role of knowledge spillovers at the aggregate level of clusters. We suggest two theoretical propositions which we test within a simple and general norm location dynamics modeling framework. We then proceed to discuss the results so obtained by comparing them with an emerging related literature based on the life cycle and viability of clusters.

Localized sources of knowledge and the effect of knowledge spillovers: an empirical study of inventors in the telecommunications industry

Ibrahim, S. E., Fallah, M. H., Reilly, R. R. — 2009-04-17

Knowledge spillovers have been considered a major driver for the increased rate of innovation in technological clusters. In this study, we respond to some recent calls for a deeper understanding of the mechanisms of localized knowledge exchange, by focusing on the effect of local sources of knowledge on inventors in telecommunication clusters. We differentiate between the different types of knowledge in our model for knowledge accessibility, and present a framework for knowledge exchange within clusters. We empirically test this model on inventors across the USA, where we compare the responses of inventors in clusters to inventors who are not in clusters. The results highlight the significance of the ‘local buzz’, and the dynamics of knowledge spillovers are explored.

Remaking regional economies: power, labor and firm strategies in the knowledge economy * Susan Christopherson and Jennifer Clark

Coe, N. M. — 2009-04-17

The impact of European integration on regional structural change and cohesion * Christiane Krieger-Boden, Edgar Morgenroth and George Petrakos

Vorley, T. — 2009-04-17

Rethinking human capital, creativity and urban growth

Storper, M., Scott, A. J. — 2009-02-12

Do jobs follow people or do people follow jobs? A number of currently prominent approaches to urbanization respond to this question by privileging the role of individual locational choice in response to amenity values as the motor of contemporary urban growth. Amenities, it is often said, have an especially potent effect on the migration patterns of individuals endowed with high levels of human capital. However, these approaches raise many unanswered questions. Theories that describe urban growth as a response to movements of people in search of consumer or lifestyle preferences can be questioned on the grounds of their assumptions about human behavior, as well as their silence in regard to the geographical dynamics of production and work. We argue that a more effective line of explanation must relate urban growth directly to the economic geography of production and must explicitly deal with the complex recursive interactions between the location of firms and the movements of labor. In this context, we also offer a reinterpretation of the currently fashionable notions of ‘creativity’ and the role of skilled labor in cities.

How does labour mobility affect the performance of plants? The importance of relatedness and geographical proximity

Boschma, R., Eriksson, R., Lindgren, U. — 2009-02-12

This article analyses the impact of skill portfolios and labour mobility on plant performance by means of a unique database that connects attributes of individuals to features of plants for the whole Swedish economy. We found that a portfolio of related competences at the plant level increases significantly productivity growth of plants, in contrast to plant portfolios consisting of either similar or unrelated competences. Based on the analysis of 101,093 job moves, we found that inflows of skills that are related to the existing knowledge base of the plant had a positive effect on plant performance, while the inflow of new employees with skills that are already present in the plant had a negative impact. Our analyses also show that geographical proximity influences the effect of different skill inflows. Inflows of unrelated skills only contribute positively to plant performance when these are recruited in the same region. Labour mobility across regions only has a positive effect on productivity growth of plants when this concerns new employees with related skills.

Migration of the creative class: evidence from Sweden

Hansen, H. K., Niedomysl, T. — 2009-02-12

A central element in contemporary regional development strategies is the ability for regions to attract and retain talented people. The underlying argument is that by attracting talented people, regions are better geared to meet the demand of competences of the knowledge economy and become more competitive. This article focuses on the migration of the creative class in Sweden. Three questions, central to recent theoretical claims but until now overlooked, are addressed: (i) Do members of the creative class move more often compared to other migrant groups? (ii) Are they more selective in their destination choices, favouring regions with a favourable ‘people climate’? (iii) Do their reasons for migration differ from those of other migrant groups? Employing unique Swedish survey and register data, the results show that the migration rates of the creative class are only marginally higher than for other groups. The results, moreover, show that most migration activities for the creative class take place just after finishing university and that the creative class people move for jobs rather than place. The presented empirical findings of the article do not support central theoretical arguments about the mobility of the creative class. In light of these findings, the article concludes with discussing why the creative class theory has become so influential despite the lack of empirical evidence.

Human capital resources and requirements across the metropolitan hierarchy of the USA

Scott, A. J. — 2009-02-12

This article is devoted to an investigation of the forms of human capital that characterize cities at different levels of the US urban hierarchy. Basic data on human capital are drawn from the O*Net information system. A first analytical exercise shows that for the USA as a whole, occupations marked by broadly cognitive human capital assets gained in employment over the period from 2000 to 2006, whereas employment in occupations marked by broadly physical human capital assets declined. These same types of assets bear a distinctive relationship to the urban hierarchy, with the former being concentrated in large metropolitan areas, and the latter in small. Changes in these assets over the 2000–2006 period are then examined. Surprisingly, cognitive assets increased most strongly in small metropolitan areas and physical assets increased most strongly in large. Further analysis of these findings suggests that they are quite consistent with a wider view of the contemporary urban economy. In particular, in large metropolitan areas, expanding human capital assets focused on the physical abilities of workers has nothing to do with the ‘old’ economy as such, but represents a major—and hitherto much overlooked—segment of the labor force whose functions revolve around the maintenance of the material and social fabric of life in those areas.

Urban interactions: soft skills versus specialization

Bacolod, M., Blum, B. S., Strange, W. C. — 2009-02-12

This article considers the role of soft skills in cities and industry clusters. It begins by specifying a model of agglomeration economies where soft skills allow agents to interact more productively. The model exposes two conflicting forces: agglomeration allows opportunities to interact, but it also produces thick, specialized markets, and this specialization can be a substitute for interaction. In order to empirically evaluate the soft skills—agglomeration relationship, the article matches data on the interaction requirements of occupations from the Dictionary of Occupational Titles to Census data. The within-industry average level of soft skills is found to be higher in cities but not in industry clusters. Workers at the top of the skill distribution in large cities typically have higher levels of soft skills than in small cities, while the least skilled workers are less skilled in large cities than in small cities. This pattern is reversed for industry clusters.

The role of the firm's internal and relational capabilities in clusters: when distance and embeddedness are not enough to explain innovation

Hervas-Oliver, J.-L., Albors-Garrigos, J. — 2009-02-12

Recent studies about clusters claim that firm-specific characteristics should be considered as central to the explanation of innovation This article contributes to this literature and explores the role of combinations of internal and relational resources to the explanation of innovation in clusters The results from 48 small and medium size enterprises (SMEs) located in one of the leading European ceramic tile clusters stress that a firm's strategy—understood as a combination of both internal and relational resources—is important, influences innovation and partially shapes the dynamics of clusters. The results highlight the role of a firm's internal resources as crucially important in the access to external knowledge, i.e. to absorption capacity. As such, the external resources in clusters are exploited and combined in different ways according to a firm's internal resources. In addition, evidence is presented of a synergistic effect from the interaction between a firm's internal and relational resources. These results support the idea that absorptive capacity is crucial to the effective exploitation of external know-how and to obtaining benefit from complementarities between internal and external resources. Neither distance nor embeddedness is sufficient to explain innovation in environments in which firms maintain frequent and multiple relationships.

Knowledge economies: innovation, organization and location * Wilfred Dolfsma

Hauge, A. — 2009-02-12

Localised technological change: towards the economics of complexity * Cristiano Antonelli

Marques, P. — 2009-02-12

Changes in regional firm founding activities: a theoretical explanation and empirical evidence * Dirk Fornahl

Micek, G. — 2009-02-12

Corrigendum

2009-02-12