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Location of New Industries – The ICT-Sector 1990-2000

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The overall purpose of this work is to study the location pattern of new industries and how it changes over time. With this objective as motivation, a set of 27 industries are classified as belonging to the ICT-sector (information and communication technology). The goods and services supplied by these industries were to a large extent new at the end of the 1980s. The paper outlines two interrelated models of vertical externalities to explain the location pattern of the industries in 1990 and 2000. The two externalities concern a firm’s input demand and its output demand. These models are introduced to illustrate how these externalities favour location in the largest functional urban regions. The same models predict that location in smaller regions is facilitated as demand grows, when internal scale economies (start-up costs) are not too strong. The empirical analyses apply a logit model to estimate location probabilities, which depend on the size and the diversity of a region’s econom

Suggested Citation

  • Johansson, Börje & Paulsson, Thomas, 2004. "Location of New Industries – The ICT-Sector 1990-2000," Working Paper Series in Economics and Institutions of Innovation 7, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    • Handle: RePEc:hhs:cesisp:0007
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    1. Fujita,Masahisa & Thisse,Jacques-François, 2013. "Economics of Agglomeration," Cambridge Books, Cambridge University Press, number 9781107001411, September.
    2. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
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    5. Raymond Vernon, 1966. "International Investment and International Trade in the Product Cycle," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 80(2), pages 190-207.
    6. Charlie Karlsson, 1997. "Product development, innovation networks, infrastructure and agglomeration economies," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 31(3), pages 235-258.
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    Cited by:

    1. Börje Johansson & Johan Klaesson, 2011. "Creative Milieus in the Stockholm Region," Chapters, in: David Emanuel Andersson & Åke E. Andersson & Charlotta Mellander (ed.), Handbook of Creative Cities, chapter 23, Edward Elgar Publishing.
    2. Peter Kresl & Balwant Singh, 2012. "Urban Competitiveness and US Metropolitan Centres," Urban Studies, Urban Studies Journal Limited, vol. 49(2), pages 239-254, February.

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    More about this item

    Keywords

    Location externalities; new industries; location dynamics; product cycles;
    All these keywords.

    JEL classification:

    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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