IDEAS home Printed from https://ideas.repec.org/p/hhs/cesisp/0002.html
   My bibliography  Save this paper

Parsing the Menagerie of Agglomeration and Network Externalities

Author

Listed:
  • Johansson, Börje

    (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)

Abstract

Externalities have for a long time been perceived as awkward cases that are alien to well-structured economic analyses. During recent decades ideas inherited from Marshall and others have regained interest in the analysis of specialisation and trade, urban formation and growth as well as innovation processes. A variety of contributions has brought about an equally varied set of externalities with labels such as localisation and urbanisation economies, industrial districts, innovative regions. This presentation attempts to bring order to the many ideas about externalities by classifying them with regard to the sources and consequences of the externalities, and to the externality mechanisms. A basic separation is made between those externalities that affect efficiency and those that generate developmen

Suggested Citation

  • Johansson, Börje, 2004. "Parsing the Menagerie of Agglomeration and Network Externalities," Working Paper Series in Economics and Institutions of Innovation 2, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
  • Handle: RePEc:hhs:cesisp:0002
    as

    Download full text from publisher

    File URL: https://static.sys.kth.se/itm/wp/cesis/cesiswp02.pdf
    Download Restriction: no
    ---><---

    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. Andersson, Martin & Karlsson, Charlie, 2002. "The role of accessibility for regional innovation systems," ERSA conference papers ersa02p242, European Regional Science Association.
    3. Alchian, Armen A & Demsetz, Harold, 1972. "Production , Information Costs, and Economic Organization," American Economic Review, American Economic Association, vol. 62(5), pages 777-795, December.
    4. Charlie Karlsson & Johan Klaesson, 2002. "The Spatial Industrial Dynamics of the ICT Sector in Sweden," Advances in Spatial Science, in: Zoltan J. Acs & Henri L. F. Groot & Peter Nijkamp (ed.), The Emergence of the Knowledge Economy, chapter 13, pages 243-275, Springer.
    5. Feldman, Maryann P. & Audretsch, David B., 1999. "Innovation in cities:: Science-based diversity, specialization and localized competition," European Economic Review, Elsevier, vol. 43(2), pages 409-429, February.
    6. Francisco L. Rivera-Batiz & Luis A. Rivera-Batiz, 2018. "Increasing Returns, Monopolistic Competition, and Agglomeration Economies in Consumption and Production," World Scientific Book Chapters, in: Francisco L Rivera-Batiz & Luis A Rivera-Batiz (ed.), International Trade, Capital Flows and Economic Development, chapter 6, pages 141-176, World Scientific Publishing Co. Pte. Ltd..
    7. Neil Alderman, 2001. "Distributed Knowledge in Complex Engineering Project Networks: Implications for Regional Innovation Systems," Advances in Spatial Science, in: Manfred M. Fischer & Josef Fröhlich (ed.), Knowledge, Complexity and Innovation Systems, chapter 11, pages 209-227, Springer.
    8. Krugman, Paul, 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," American Economic Review, American Economic Association, vol. 70(5), pages 950-959, December.
    9. Zoltan J. Acs & Henri L. F. Groot & Peter Nijkamp (ed.), 2002. "The Emergence of the Knowledge Economy," Advances in Spatial Science, Springer, number 978-3-540-24823-1.
    10. Belleflamme, Paul & Picard, Pierre & Thisse, Jacques-Francois, 2000. "An Economic Theory of Regional Clusters," Journal of Urban Economics, Elsevier, vol. 48(1), pages 158-184, July.
    11. Zoltán J. Ács, 2001. "Endogenous Technological Change, Entrepreneurship and Regional Growth," Advances in Spatial Science, in: Manfred M. Fischer & Josef Fröhlich (ed.), Knowledge, Complexity and Innovation Systems, chapter 12, pages 228-247, Springer.
    12. Jaffe, Adam B, 1989. "Real Effects of Academic Research," American Economic Review, American Economic Association, vol. 79(5), pages 957-970, December.
    13. Tibor Scitovsky, 1954. "Two Concepts of External Economies," Journal of Political Economy, University of Chicago Press, vol. 62(2), pages 143-143.
    14. Roberta Capello, 2002. "Entrepreneurship and spatial externalities: Theory and measurement," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 36(3), pages 387-402.
    15. Fischer, M.M. & Nijkamp, P., 2009. "Entrepreneurship and Regional Development," Serie Research Memoranda 0035, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    16. Roberta Capello, 2001. "Urban Innovation and Collective Learning: Theory and Evidence from Five Metropolitan Cities in Europe," Advances in Spatial Science, in: Manfred M. Fischer & Josef Fröhlich (ed.), Knowledge, Complexity and Innovation Systems, chapter 10, pages 181-208, Springer.
    17. Stefano Breschi & Francesco Lissoni, 2001. "articles: Localised knowledge spillovers vs. innovative milieux: Knowledge "tacitness" reconsidered," Papers in Regional Science, Springer;Regional Science Association International, vol. 80(3), pages 255-273.
    18. Krugman, Paul R., 1979. "Increasing returns, monopolistic competition, and international trade," Journal of International Economics, Elsevier, vol. 9(4), pages 469-479, November.
    19. Venables, Anthony J, 1996. "Equilibrium Locations of Vertically Linked Industries," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 37(2), pages 341-359, May.
    20. Johansson, Borje & Westin, Lars, 1994. "Affinities and Frictions of Trade Networks," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 28(3), pages 243-261, September.
    21. Kamien,Morton I. & Schwartz,Nancy L., 1982. "Market Structure and Innovation," Cambridge Books, Cambridge University Press, number 9780521293853, December.
    22. F. H. Knight, 1924. "Some Fallacies in the Interpretation of Social Cost," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 38(4), pages 582-606.
    23. Baptista, Rui, 2000. "Do innovations diffuse faster within geographical clusters?," International Journal of Industrial Organization, Elsevier, vol. 18(3), pages 515-535, April.
    24. Krugman, Paul R, 1981. "Intraindustry Specialization and the Gains from Trade," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 959-973, October.
    25. Fujita, Masahisa, 1988. "A monopolistic competition model of spatial agglomeration : Differentiated product approach," Regional Science and Urban Economics, Elsevier, vol. 18(1), pages 87-124, February.
    26. Rui Baptista, 1999. "The Diffusion of Process Innovations: A Selective Review," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 6(1), pages 107-129.
    27. Ethier, Wilfred J, 1982. "National and International Returns to Scale in the Modern Theory of International Trade," American Economic Review, American Economic Association, vol. 72(3), pages 389-405, June.
    28. Manfred M. Fischer & Josef Fröhlich (ed.), 2001. "Knowledge, Complexity and Innovation Systems," Advances in Spatial Science, Springer, number 978-3-662-04546-6.
    29. Nelson, Richard R. & Norman, Victor D., 1977. "Technological change and factor mix over the product cycle : A model of dynamic comparative advantage," Journal of Development Economics, Elsevier, vol. 4(1), pages 3-24, February.
    30. Yarbrough, Beth V. & Yarbrough, Robert M., 1988. "The transactional structure of the firm : A comparative survey," Journal of Economic Behavior & Organization, Elsevier, vol. 10(1), pages 1-28, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Börje Johansson & Hans Lööf, 2011. "FDI Inflows to Sweden: Consequences for Innovation and Renewal," Chapters, in: Sameeksha Desai & Peter Nijkamp & Roger R. Stough (ed.), New Directions in Regional Economic Development, chapter 14, Edward Elgar Publishing.
    2. Edward Bergman, 2009. "Embedding network analysis in spatial studies of innovation," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 43(3), pages 559-565, September.
    3. Augusto Cerqua & Guido Pellegrini, 2017. "Industrial policy evaluation in the presence of spillovers," Small Business Economics, Springer, vol. 49(3), pages 671-686, October.
    4. Apostolos Baltzopoulos & Anders Brostr�m, 2013. "Attractors of Entrepreneurial Activity: Universities, Regions and Alumni Entrepreneurs," Regional Studies, Taylor & Francis Journals, vol. 47(6), pages 934-949, June.
    5. Borje Johansson & Hans Loof, 2008. "Innovation Activities Explained By Firm Attributes And Location," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 17(6), pages 533-552.
    6. Dan Kaufmann & Dafna Schwartz, 2009. "Networking strategies of young biotechnology firms in Israel," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 43(3), pages 599-613, September.
    7. Argentino Pessoa, 2014. "Agglomeration and regional growth policy: externalities versus comparative advantages," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 53(1), pages 1-27, August.
    8. Martin Andersson & Olof Ejermo, 2005. "How does accessibility to knowledge sources affect the innovativeness of corporations?—evidence from Sweden," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 39(4), pages 741-765, December.
    9. Augusto Cerqua & Guido Pellegrini, 2014. "Beyond the SUTVA: how policy evaluations change when we allow for interactions among firms," Working Papers 2/14, Sapienza University of Rome, DISS.
    10. Augusto Cerqua & Guido Pellegrini, 2013. "Beyond the SUTVA: how industrial policy evaluations change when we allow for interaction among firms," ERSA conference papers ersa13p340, European Regional Science Association.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Knaap, T., 1998. "A survey of complementaries in growth and location theories," Research Report 98C44, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
    2. repec:dgr:rugsom:98c44 is not listed on IDEAS
    3. Simonetta Longhi & Peter Nijkamp & Iulia Traistaru, 2003. "Determinants of Manufacturing Location in EU Accession Countries," ERSA conference papers ersa03p310, European Regional Science Association.
    4. Traistaru, Iulia & Nijkamp, Peter & Longhi, Simonetta, 2002. "Regional specialization and concentration of industrial activity in accession countries," ZEI Working Papers B 16-2002, University of Bonn, ZEI - Center for European Integration Studies.
    5. Martin Andersson & Olof Ejermo, 2002. "Knowledge Production in Swedish Functional Regions 1993-1999," KITeS Working Papers 139, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Feb 2003.
    6. Martin Andersson & Olof Ejermo, 2005. "How does accessibility to knowledge sources affect the innovativeness of corporations?—evidence from Sweden," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 39(4), pages 741-765, December.
    7. Duranton, Gilles & Puga, Diego, 2014. "The Growth of Cities," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 5, pages 781-853, Elsevier.
    8. Roberta CAPELLO, 2012. "Regional economics: theoretical achievements and challenges," Timisoara Journal of Economics, West University of Timisoara, Romania, Faculty of Economics and Business Administration, vol. 5(18), pages 313-335.
    9. Kim, Ho Yeon, 2012. "Shrinking population and the urban hierarchy," IDE Discussion Papers 360, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    10. José M. Gaspar, 2020. "Paul Krugman: contributions to Geography and Trade," Letters in Spatial and Resource Sciences, Springer, vol. 13(1), pages 99-115, April.
    11. Martin Andersson & Charlie Karlsson, 2004. "The role of accessibility for the performance of regional innovation systems," Chapters, in: Charlie Karlsson & Per Flensburg & Sven-Åke Hörte (ed.), Knowledge Spillovers and Knowledge Management, chapter 10, pages 283-310, Edward Elgar Publishing.
    12. Sam Tavassoli & Lars Bengtsson & Charlie Karlsson, 2017. "Strategic entrepreneurship and knowledge spillovers: spatial and aspatial perspectives," International Entrepreneurship and Management Journal, Springer, vol. 13(1), pages 233-249, March.
    13. Iritié, B. G. Jean-Jacques, 2014. "Enjeux des politiques industrielles basées sur les clusters d'innovation: cas des pôles de compétitivité [Issues of Innovative Clusters-based Industrial Policy: Case of Pole of Competitiveness]," MPRA Paper 54429, University Library of Munich, Germany.
    14. Giuseppe Francesco Gori & Renato Paniccià, 2015. "A structural multisectoral model with new economic geography linkages for Tuscany," Papers in Regional Science, Wiley Blackwell, vol. 94, pages 175-196, November.
    15. Bel Hadj Tarek, 2012. "Product Differentiation and Intra-Industrial Trade: Quantitative Assessment in the Case of Tunisia," Journal of Economics and Behavioral Studies, AMH International, vol. 4(10), pages 570-587.
    16. B.G. Jean Jacques Iritié, 2018. "Economic issues of innovation clusters-based industrial policy: a critical overview," Global Business and Economics Review, Inderscience Enterprises Ltd, vol. 20(3), pages 286-307.
    17. Kristian Behrens & Frédéric Robert‐Nicoud, 2009. "Krugman's Papers in Regional Science: The 100 dollar bill on the sidewalk is gone and the 2008 Nobel Prize well‐deserved," Papers in Regional Science, Wiley Blackwell, vol. 88(2), pages 467-489, June.
    18. Junius, Karsten, 1997. "Economies of scale: A survey of the empirical literature," Kiel Working Papers 813, Kiel Institute for the World Economy (IfW Kiel).
    19. Ho Yeon KIM & Petra de Jong & Jan Rouwendal & Aleid Brouwer, 2012. "Shrinking population and the urban hierarchy [Housing preferences and attribute importance among Dutch older adults: a conjoint choice experiment]," ERSA conference papers ersa12p350, European Regional Science Association.
    20. Gashawbeza Bekele & Randall Jackson, 2006. "Theoretical Perspectives on Industry Clusters," Working Papers Working Paper 2006-05, Regional Research Institute, West Virginia University.
    21. Picard, P. M. & Toulemonde, E., 2003. "Regional asymmetries: economies of agglomeration versus unionized labor markets," Regional Science and Urban Economics, Elsevier, vol. 33(2), pages 223-249, March.

    More about this item

    Keywords

    Externalities; Networks; Agglomeration; Innovation;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • 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:hhs:cesisp:0002. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Vardan Hovsepyan (email available below). General contact details of provider: https://edirc.repec.org/data/cekthse.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.