Modeling industrial evolution in geographical space

Arbeitspapier

In this paper we study a class of evolutionary models of industrial agglomeration with local positive feedbacks, which allow for a wide set of empirically-testable implications. Their roots rest in the Generalized Polya Urn framework. Here, however, we build on a birth-death process over a finite number of locations and a finite population of firms. The process of selection among production sites that are heterogeneous in their intrinsic attractiveness occurs under a regime of dynamic increasing returns depending on the number of firms already present in each location. The general model is presented together with a few examples of small economies which help to illustrate the properties of the model and characterize its asymptotic behavior. Finally, we discuss a number of empirical applications of our theoretical framework. The basic model, once taken to the data, is able to empirically disentangle the relative strength of technologically-specific agglomeration drivers (affecting differently firms belonging to different industrial sectors in each location) from site-specific geographical forces (horizontally acting upon all sectors in each location).

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: LEM Working Paper Series ; No. 2007/06

Classification and Topics

• Classification: Wirtschaft
• Subject: Industrial Location ; Agglomeration ; Dynamic Increasing Returns ; Markov Chains ; Polya Urns ; Industrieregion ; Regionales Cluster ; Raumwirtschaftstheorie ; Evolutionsökonomik ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Bottazzi, Giulio ; Dosi, Giovanni ; Fagiolo, Giorgio ; Secchi, Angelo
• Event: Veröffentlichung
• (who): Scuola Superiore Sant'Anna, Laboratory of Economics and Management (LEM)
• (where): Pisa
• (when): 2007

Further information

• Handle: http://hdl.handle.net/10419/89380
• Last update: 10.03.2025, 11:43 AM CET