Agglomeration and product innovation in China

Hongyong Zhang 21 July 2014

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Spatial agglomeration of economic activities is generally assumed to improve productivity and spur firms’ innovation through localisation economies and urbanisation economies.1 There is an extensive empirical literature investigating the effects of localisation and urbanisation on firm-level productivity. Despite its economic importance, there are few empirical studies focusing on agglomeration and product innovation. Feldman and Audretsch (1999) and De Beule and Van Beveren (2010) are two of the few exceptions.

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Topics:  Productivity and Innovation

Tags:  R&D, productivity, China, spatial concentration, innovation, subsidies, clusters, agglomeration

Caution to place makers: Greater firm density does not always promote incumbent firm health

William Kerr, Oliver Falck, Christina Günther, Stephan Heblich 11 February 2013

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A common theme in economic geography is that increasing returns to scale at the local level are essential for explaining the geographical distribution of economic activity. These agglomerative forces are often cited as a rationale for policy intervention to attract new firms to areas. Tight geographic concentration, however, can also raise countervailing costs as firms compete for local inputs. This makes the gains from increased spatial concentration around incumbent firms uncertain.

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Topics:  Industrial organisation

Tags:  Germany, clusters, agglomeration, East Germany

Is the new economic geography passé?

Marius Brülhart 07 January 2009

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In his Nobel Prize lecture on December 8, Paul Krugman argued that his core-periphery model of economic geography is in some sense becoming obsolete. It is not true that “the latest wrinkle in theory must be the latest wrinkle in the way the world works”, he pointed out, and he went on to speculate that “the world is becoming less new geography and more classical”.

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Topics:  Development Productivity and Innovation

Tags:  clusters, urbanisation, agglomeration, economic geography

Natural clusters: Why policies promoting agglomeration are unnecessary

Philippe Martin, Thierry Mayer, Florian Mayneris 04 July 2008

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Policymakers love to promote industrial clusters. Since the end of the 1980s, national and local governments in Germany, Brazil, Japan, South Korea, Spanish Basque country, and France, inter alia, have attempted to foster their development. And they haven’t done it on the cheap – the French government recently devoted €1.5 billion to “competitiveness clusters”. Why are politicians so keen on clusters and is the money well spent?

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Topics:  Microeconomic regulation Productivity and Innovation

Tags:  clusters, agglomeration, localisation economies

Spatial concentration and firm-level productivity in France

Philippe Martin, Thierry Mayer, Florian Mayneris,

Date Published

Mon, 06/16/2008

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http://www.cepr.org/pubs/new-dps/dplist.asp?dpno=6858.asp

The analysis of agglomeration economies focuses around two separate important questions: how large the gains from agglomeration are and how much firms internalize these gains when deciding where to locate. In order to provide answers, the authors of CEPR DP6858 focus on agglomeration externalities and distinguish between urbanization economies, which refer to the cross fertilization of different industries on a given territory and localization economies, which group the concepts of externalities on inputs market, on the labour market and knowledge.

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