ABSORPTIVE CAPACITY,KNOWLEDGE FLOWS,AND INNOVATION IN U.S. METROPOLITAN AREAS

High growth and progressive regions possess a culture that promotes innovation. Innovation depends on a region's ability to use its own existing knowledge and knowledge generated elsewhere. This paper demonstrates the importance of the ability to absorb external knowledge in explaining innovation productivity for 106 U.S. metropolitan areas. Using a spatial interaction model of patent citation flows with origin and destination dependence, the destination fixed‐effects coefficients provides a measure of a region's absorptive capacity. We identify local conditions that shape a region's absorptive capacity and demonstrate it has a positive and significant impact on innovation productivity.     

The Impact of Public Capital Stock on Regional Convergence in Turkey

The effect of public capital on regional output and private sector productivity has been the subject of considerable research in the field of regional development literature. However, there have been only a few studies that develop linkages between public capital and regional economic convergence. This study examines the dynamic effects of public capital and transportation capital stocks on output per capita in terms of regional convergence in Turkey at NUTS 2 level. A conditional convergence model based on per capita gross domestic product and per capita public capital and transportation capital stocks is estimated using the panel data set for the Turkish regions for the time period of 1980–2001. The results reveal that public capital has a positive and significant effect on output per capita and thus on regional convergence in some of the models in the Turkish regions,. However, the transportation component of public capital stock has a negative effect on regional convergence in all models employed in the study. This implies that transportation capital stock leads to larger regional disparities between the Turkish regions.     

Delocalization Patterns in University–Industry Interaction: Evidence from the Sixth R&D Framework Programme

Increasing university–industry interaction (UII) and university contribution to the local economy are compatible—conventional wisdom would say. However, similar to other university activities, interaction with industry may be limited due to a lack of absorptive capacity in local firms. The data of those participating in the European Union's (EU's) Sixth R&D Framework Programme (FP6) were used to obtain values for the number and, notably, the budgets of UII projects at the regional level for the EU27. Two types of interactions were considered: inside and outside the region. Our analysis indicates that universities from regions whose firms have low absorptive capacity participate more often in FP6 projects with firms outside the region. Our results highlight the value of policies that facilitate firm R&D to enhance collaboration with regional universities.     

Innovation,knowledge and relations – on the role of clusters for firms’ innovativeness

ABSTRACT

For more than two decades, theories on regional clusters have inspired economic and structural policies at the European, national and regional levels. Based on the assumption that clusters generate innovation, policy-makers at all levels of governance have adopted instruments and mechanisms to stimulate, resource and sustain clusters. Despite the considerable attention paid to the clustering phenomenon, empirical evidence on to what extent firms’ innovation activities benefit from operating in clusters is scarce and inconclusive. This paper contributes to the micro-foundation of clustering effects by examining the characteristics and activities of cluster firms in relation to their innovativeness. Bridging innovation, management and cluster theories, it is argued that structural and relational embeddedness, relational capital and absorptive capacity influence clustered firms' innovativeness. Partial least-squares structural equation modelling of data from 104 firms in two software and information technology service sector clusters reveals that firms’ structural embeddedness (i.e. frequency of interactions) in clusters and external networks facilitates innovation cooperation. Firms’ absorptive capacity reinforces this positive effect of cluster-internal interactions on innovation cooperation. Results also suggest a substitution effect of trust as relational control mechanisms for formal control mechanisms within the cluster. However, the study finds no significant impact of firms’ innovation cooperation within the cluster (i.e. relational embeddedness) on their innovation success.     

A NEOCLASSICAL MODEL OF REGIONAL GROWTH IN INDONESIA

In this paper a neoclassical model of regional growth is specified, estimated, and applied to the provinces of Indonesia. While parametric estimates indicate that factors of production respond as expected to neoclassical incentives, the attractiveness of growing regions for capital and labor inputs leads to instability and divergence among regions when the model is solved dynamically. A simulation of government intervention via a policy of encouraging capital growth in lagging regions demonstrates the potential of reversing such effects and encouraging regional convergence.     

Are there differences in social capital related to corporate regional engagement in dynamic and less dynamic non-core regions?

ABSTRACT

This article explores corporate regional engagement and related social capital in non-core regions. Corporate regional engagement comprises various activities of firms to influence regional contexts, which are challenging in non-core regions (e.g. on account of their organizational or institutional thinness). Corporate regional engagement engenders positive effects for regional development when firms collaborate among themselves (bonding social capital) and with other actors (bridging social capital) to improve regional endowments. We assume that dynamic regions have at their disposal higher levels of inclusive social capital in terms of collaboration networks for regional concerns and trust, while less dynamic regions have more exclusive and fragmented social capital. Consequently, less dynamic regions in particular appear to have potential to develop in a more social sense by activating the endogenous potential of region-wide collaboration. Those assumptions are tested based on a survey with Chief Executive Officers from the manufacturing industry from three dynamic and three less dynamic Swiss regions. The findings show that in dynamic regions, more firms are members of regional cross-industry associations, favouring regional collaboration; in less dynamic regions, meanwhile, more firms are members of industry-specific associations and service clubs, where benefits seem to be higher for individual firms than for the regional business environment.     

The Regional Allocation of Public Investment: Efficiency or Equity?

In this paper we examine the effect of public investment on the regional economies of Japan. The efficient policy for regional allocation of public capital is to invest in highly productive regions, whereas the actual policy pursues equity goals by allocating more public investment to depressed regions. We determine the effects of this equity- oriented allocation by estimating the aggregate regional production function and calculating the productivity of public capital stock for each region, using a cross-sectional time-series data set. Our results show that the marginal productivity of public capital has recently declined in most depressed regions, whereas the productivity in developed regions (e.g., Tokyo, Osaka) has increased slightly. We compare alternative policies of allocating public investment and their effects on the regional and national economies using numerical simulations. We then quantitatively describe the trade-off between the efficient and the equitable allocation of public investment.     

EFFECT OF ENVIRONMENTAL REGULATIONS ON STATE- LEVEL MANUFACTURING CAPITAL FORMATION*

ABSTRACT We quantify the effect of environmental regulations on regional capital formation in the manufacturing sector. Our model integrates environmental regulations into a choice-theoretic model derived from Tobin's q theory of investment. It is postulated that more stringent environmental regulations raise the firm's cost of production both directly and indirectly, thus reducing the firm's q value and lowering the rate of capital formation. The empirical results indicate that the effect of environmental regulations on net capital formation is modest. We do find that environmental regulations affect regions differently. More stringent environmental regulations will improve the relative position of manufacturers in the North-east, South Atlantic and West. Over one-fourth of the dollar losses in manufacturing capacity would occur in five states: Texas, California, Pennsylvania, Ohio and Michigan.     

Knowledge Spillovers and Total Factor Productivity: Evidence Using a Spatial Panel Data Model

This article investigates the impact of knowledge capital stocks on total factor productivity (TFP) through the lens of the knowledge capital model proposed by Griliches (1979) , augmented with a spatially discounted cross-region knowledge spillover pool variable. The objective is to shift attention from firms and industries to regions and to estimate the impact of cross-region knowledge spillovers on TFP in Europe. The dependent variable is the region-level TFP, measured in terms of the superlative TFP index suggested by Caves, Christensen, and Diewert (1982) . This index describes how efficiently each region transforms physical capital and labor into output. The explanatory variables are internal and out-of-region stocks of knowledge, the latter capturing the contribution of cross-region knowledge spillovers. We construct patent stocks to proxy annual regional knowledge capital stocks for N =203 regions during 1997–2002. In estimating the effects, we implement a spatial panel data model that controls for spatial autocorrelation as well as individual heterogeneity across regions. The findings provide a fairly remarkable confirmation of the role of knowledge capital contributing to productivity differences among regions and add an important spatial dimension to discussions in the literature by showing that productivity effects of knowledge spillovers increase with geographic proximity.     

The Dynamics of Regional Invention and Innovation: Innovative Capacity and Regional Change in the Twentieth Century

The twentieth century dynamics of United States regional invention trends are explored in this study. Historically, regions that become major loci of invention have always gained much influence, through innovation diffusion, their human capital infrastructures, and their national economic and political projection. The United States has experienced a remarkable inversion of regional roles on invention since the middle of the twentieth century, where the predominant position of heartland regions (the Northeast and the Midwest) is being overturned. This analysis develops a macro-level measure of inventive output, innovative capacity, to evaluate changes in regional inventive performance and the potential for innovation. The analysis of patent age cycles provides insights on the temporal structure of the national and regional innovative capacity, and on the dynamics of crisis periods for U.S. scientific and technological invention. A consideration of regional income trends over the twentieth century and of innovative capacity performance shows the potential importance of endogenously generated inventions for regional development.     

Regional Concentration of the Knowledge-based Economy in the EU: Towards a Renewed Oligocentric Model?

This paper aims to contribute to a better understanding of the Knowledge-based Economy spatial distribution across the European Union (EU) regions (NUTS II), linking recent research approaches on innovation and structural change with approaches to regional economics. As a means of conducting this research, we classify economic activities according to six sectors based on their knowledge/technology intensity. Our results show that the higher the knowledge/technology content of the economic activity, the higher the concentration level of the activity. We find that some service activities (those considered knowledge intensive) have similar concentration levels to those operating in high or medium tech manufacturing. With regard to specialization, the most outstanding result is the strong presence of high and medium knowledge intensive service activities in metropolitan/capital regions. In general, our results reinforce the notion that an oligocentric model persists in Europe, with the southern German regions leading high and medium tech manufacturing, the south-east of England leading in high knowledge-intensive services, and with the mid-core model exemplified by the European metropolitan archipelago (particularly capital cities) in both northern and southern Europe.     

KNOWLEDGE SPILLOVERS,ABSORPTIVE CAPACITY,AND SKILL INTENSITY OF CHILEAN MANUFACTURING PLANTS*

ABSTRACT Knowledge spillovers are an important source of economic growth. In this study, we identify a mechanism through which knowledge spillovers occur among plants in the Chilean manufacturing industry. A plant‐level production function is estimated with the absorptive‐capacity hypothesis, that is, employment of skilled workers is a key channel through which knowledge is transmitted across plants. Results show that a plant's productivity from spillovers increases with its skill intensity, which is measured by the share of skilled workers in total employment. We also find that plants in a region with a large knowledge stock increase their skill intensity to benefit more from spillovers. Our results suggest that an increase in regional knowledge stock is the most effective policy to improve a plant's productivity. However, policies that encourage a plant to employ high skill‐intensive production also enhance its productivity.     

Talent,technology and tolerance in Canadian regional development

This article examines the factors that shape economic development in Canadian regions. It employs path analysis and structural equation models to isolate the effects of technology, human capital and/or the creative class, universities, the diversity of service industries and openness to immigrants, minorities and gay and lesbian populations on regional income. It also examines the effects of several broad occupations groups—business and finance, management, science, arts and culture, education and health care—on regional income. The findings indicate that both human capital and the creative class have a direct effect on regional income. Openness and tolerance also have a significant effect on regional development in Canada. Openness towards the gay and lesbian population has a direct effect on both human capital and the creative class, while tolerance towards immigrants and visible minorities is directly associated with higher regional incomes. The university has a relatively weak effect on regional incomes and on technology as well. Management, business and finance and science occupations have a sizeable effect on regional income; arts and culture occupations have a significant effect on technology; health and education occupations have no effect on regional income.     

Contrasts between first-tier and second-tier cities in Europe: a functional perspective

Second-tier cities have been experiencing renewed interest within policy and research contexts, which is reversing a tradition of relative neglect due to the long-standing focus on large cities and capitals. This paper compares European second-tier and first-tier cities with regard to the presence of urban functions and how these are spread over their urban regions. The analysis shows the existence of a substantial ‘first city bonus’: a surplus of urban functions in first-tier cities which cannot be explained by their size or network embeddedness. We also show that second-tier cities are better served with urban functions in the absence of a dominant capital. In first-tier urban regions, the core municipality exploits the critical mass of the urban region to support its own functions, leaving that region functionally underserved. Second-tier cities lack this absorptive capacity, and their urban regions are endowed with more urban functions. These functional differences mean that second-tier cities demand a differentiated research and policy approach, in which city-regional integration becomes an important territorial development strategy. Rather than the dispersion process in first-tier cities leading to a ‘regionalization of the city’, integration in second-tier urban regions may be seen as a process of ‘citification of the region’.     

External Knowledge,Territorial Inertia and Local Development: An Exploratory Case Study

This study examines the relationship between an entrepreneur's absorptive capacity, the spiral of knowledge and local development. Although a great number of theoretical and empirical studies have pointed out the importance of local networking and informal contacts when spreading knowledge locally, very few of them have provided robust evidence on the role of the entrepreneur's absorptive capacity and external knowledge in local development. This paper tries to explain the reasons why this problem can no longer be ignored and provides a preliminary examination, through an exploratory case study, of the role that the entrepreneur's absorptive capacity and external knowledge play in overcoming territorial inertia and enhancing local development.     

SCALE ECONOMIES,REGIONAL EXTERNALITIES,AND THE POSSIBILITY OF UNEVEN REGIONAL DEVELOPMENT*

ABSTRACT. This paper presents a model of regional development which attempts to explain differing patterns of growth in two regions. The model is an extension of Krugman's model of uneven development, but it incorporates not only scale economies within each region but also regional externalities across the regions. Depending on relative magnitudes of net scale economies of the two regions, the model entails different regional development patterns: uneven development, stable or joint development, or a mix of the two. The novel feature of the present model is that different regional development patterns can be explained within the same analytical framework.     

西部开发的人力资本问题研究

发展理论的演进过程表明,人力资本的不断改善在欠发达地区经济发展中起着关键性作用。因此,在实施西部大开发中应把改善人力资本置于重要的地位予以重视。基于此,本文着重分析了西部地区人力资本面临的主要问题,以及为改善人力资本应采取的主要对策。     

Capital Accumulation,Economic Restructuring,and Nonequilibrium Regional Growth Dynamics

Recently, there has been a resurgence of interest in explaining the significance and persistence of regional growth differentials. Much of the debate in contemporary political economy has focussed on the relative importance of either “weak” or “strong” competition in regulating movements in prices, profits, and investments both within and between economic sectors and regions. However, little attention has been directed toward developing theoretical models that are capable of evaluating the relative importance of (non) equilibrating forces in determining the long-run accumulation dynamics of capitalist space economies. In this paper, I develop an approach to modeling regional growth that simultaneously theorizes the link between processes of economic restructuring and regional capital accumulation. I examine the stability properties of this model in order to evaluate the theoretical significance of both equilibrating and nonequilibrating forces in determining the trajectory of regional outputs, profits and employment.     

Developing cross-industry innovation capability: regional drivers and indicators within firms

ABSTRACT

The role of firms in the process of regional renewal and path development is a somewhat neglected area in the existing literature. With few exceptions, the literature is mainly concerned with aggregated development paths. To cover this gap, the current study turns its attention to cross-industry innovation capability (CIIC) building in firms and discusses how conditions for innovation and learning in a region drive this process. We introduce a new concept of CIIC – that is, the firm’s ability to transform knowledge and ideas from different industries into new products, processes and systems and/or its ability to adapt existing products, processes and systems to new industries – and identify its drivers and indicators. The discussion is supported by empirical studies of firms in three Norwegian case regions that undergo the restructuring process due to the recent severe decrease in oil prices. Our empirical data demonstrate that organizationally thick and diversified regions are more favourable for firms’ abilities to develop CIIC and cross-industry innovation activity. As a result, we emphasize that future regional policies should have a stronger focus on the linkages between internal firm characteristics and regional innovation systems to contribute to the firms’ absorptive capacity for developing cross-industry innovation.