Networks, Diffusion of Knowledge, and Regional Innovative Performance

Abstract

Research in economic geography investigates the reasons why particular economic activities choose to establish themselves in particular places and the role of agglomeration forces in generating these observed disparities in the distribution of economic activity and subsequent economic growth (Henderson and Thisse 2004; World Bank 2009). This literature made it into mainstream economics primarily thanks to the work of the 2008 Nobel Laureate Paul Krugman (Krugman 1991a, 1991b). Three agglomeration forces, with variations, are generally discussed (Marshall 1890): (i) labor market pooling; (ii) market for intermediate inputs; and (iii) technological externalities, that is to say, knowledge spillovers between firms in the same industry favored by their physical proximity (Duranton and Puga 2004). Even though Krugman himself disregarded the latter because of their immeasurability, knowledge spillovers play a central role in the economic geography literature as a primary agglomeration force, and in particular, within the geography of innovation subfield, to which this special issue contributes (Audretsch and Feldman 1996; Jaffe, Trajtenberg, and Henderson 1993; Romer 1990).