Advertisement

R&D Public Expenditure, Knowledge Spillovers and Agglomeration: Comparative Statics and Dynamics

  • Pasquale CommendatoreEmail author
  • Ingrid Kubin
  • Carmelo Petraglia
Chapter

Abstract

Since the introduction of the influential core-periphery (CP) model by Krugman (1991),New EconomicGeography (NEG) models have provided a natural framework for non-linear dynamic analysis.1 Moreover, as shown by the comprehensive picture of policy implications of the NEG paradigm provided by Baldwin et al. (2003), a well established finding is that policy changes have non-linear effects on industrial location, in general.

Why economic activities tend to cluster in space is an old question. Often referring to Marshall’s famous classification, regional and urban economists analysed the agglomerative effects of better access to public goods in central locations, of knowledge spillovers between firms and of labour market pooling (see for a recent survey Duranton and Puga 2004). Instead, the NEG focuses on the trade costs, increasing returns at the firm level and factor mobility, and determines endogenously the spatial distribution of (monopolistically competitive) firms by the interplay of agglomeration and dispersion forces (see Venables 2008).

Keywords

Public Good Trade Freeness Public Expenditure Knowledge Spillover Trade Cost 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Alligood, K. T., Sauer, T. D., & Yorke, J. A. (1997). Chaos: An introduction to dynamical systems. New York: Springer.Google Scholar
  2. Baldwin, R. E., & Martin, P. (2004). Agglomeration and regional growth. In J. V. Henderson & J. F. Thisse (Eds.), Handbook of regional and Urban economics: Volume 4 cities and geography (pp. 2671–2711). Elsevier North-Holland: New York.Google Scholar
  3. Baldwin, R. E., Forslid, R., Martin, P., Ottaviano, G., & Robert-Nicoud, F. (2003). Economic geography and public policy. Princeton, NJ: Princeton University Press.Google Scholar
  4. Bischi, G. I., & Lamantia, F. (2002). Nonlinear duopoly games with positive cost externalities due to spillovers. Chaos, Solitons and Fractals, 13, 701–721.CrossRefGoogle Scholar
  5. Bischi, G. I., Dawid, H., & Kopel, M. (2003a). Gaining the competitive edge using internal and external spillovers: A dynamic analysis. Journal of Economic Dynamics and Control, 27, 2171–2193.CrossRefGoogle Scholar
  6. Bischi, G. I., Dawid, H., & Kopel, M. (2003b). Spillover effects and the evolution of firm clusters. Journal of Economic Behavior and Organization, 50, 47–75.CrossRefGoogle Scholar
  7. Brakman, S., Garretsen, H., & van Marrewijk, C. (2008). Agglomeration and government spending. In S. Brakman & H. Garretsen (Eds.), Foreign direct investment and the multinational enterprise (pp. 89–116). Cambridge, MA: MIT.Google Scholar
  8. Commendatore, P., & Kubin I. (2006). Taxation and agglomeration. Working paper 06–08, Center for Nonlinear Dynamics in Economics and Finance (CeNDEF), University of Amsterdam.Google Scholar
  9. Commendatore, P., Currie, M., & Kubin, I. (2007). Chaotic footloose capital. Nonlinear Dynamics, Psychology, and Life Sciences, 11(2), 267–289.Google Scholar
  10. Commendatore, P., Currie, M., & Kubin, I. (2008a). Footloose entrepreneurs, taxes and subsidies. Spatial Economic Analysis 3, 115–141.CrossRefGoogle Scholar
  11. Commendatore, P., Kubin, I., & Petraglia, C. (2008b). Productive public expenditure in a new economic geography model. Économie Internationale/International Economics, 114(2), 133–160.Google Scholar
  12. Commendatore, P., Kubin, I., & Petraglia, C. (2009). Footloose capital and productive public services. In N. Salvadori, P. Commendatore, & M. Tamberi (Eds.), Geography, structural change and economic development: Theory and empirics (pp. 3–28). Aldershot: Edward Elgar.Google Scholar
  13. Duranton, G., & Puga, D. (2004). Micro-foundations of urban agglomeration economies. In J. Henderson & J. F. Thisse (Eds.), Handbook of Urban and regional economics (Vol. 4). North-Holland: Amsterdam.Google Scholar
  14. Fujita, M., Krugman, P. R., & Venables, A. (1999). The spatial economy: Cities, regions and international trade. Cambridge, MA: MIT.Google Scholar
  15. Jaffe, A., Traitenberg, M., & Henderson, R. (1993). Geographical localization of knowledge spillovers as evidenced by patent citations. Quarterly Journal of Economics, 108, 577–598.CrossRefGoogle Scholar
  16. Krugman, P. R. (1991). Increasing returns and economic geography. Journal of Political Economy, 99, 483–499.CrossRefGoogle Scholar
  17. Martin, P., & Rogers, C. A. (1995). Industrial location and public infrastructure. Journal of International Economics, 39, 335–351.CrossRefGoogle Scholar
  18. Mees, A. I. (1975). The revival of cities in medieval Europe. Regional Science and Urban Economics, 5, 403–425.CrossRefGoogle Scholar
  19. Neary, P. J. (2001). On hype and hyperbolas: Introducing the new economic geography. Journal of Economic Literature, 39, 536–561.Google Scholar
  20. Nooteboom, B. (2000). Learning and innovation in organizations and sconomies. Oxford: Oxford University Press.Google Scholar
  21. Puga, D. (1998). Urbanization patterns: European versus less developed countries. Journal of Regional Science, 38, 231–252.CrossRefGoogle Scholar
  22. Puu, T. (1981). Catastrophic structural change in a continuous regional model. Regional Science and Urban Economics, 11, 317–333.CrossRefGoogle Scholar
  23. Sachs, J. D., & McCord, G. C. (2008). Regional development, geography of. In S. N. Durlauf & E. Blume (Eds.), The new palgrave dictionary of economics, Second Edition. UK: Palgrave Macmillan. The New Palgrave Dictionary of Economics Online. Palgrave Macmillan. 08 April 2009 < URLhttp://www.dictionaryofeconomics.com/article?id=pde2008{ _}R000077 > doi: 10.1057/9780230226203.1413.
  24. Samuelson, P. (1954). The transfer problem and transport costs, II: Analysis of effects of trade impediments. Economic Journal, 64, 264–289.CrossRefGoogle Scholar
  25. Venables, A. J. (2008). New economic geography. In S. N. Durlauf & E. Blume (Eds.), The new palgrave dictionary of economics, Second Edition. UK: Palgrave Macmillan. The New Palgrave Dictionary of Economics Online. Palgrave Macmillan. 08 April 2009 http://www.dictionaryofeconomics.com/article?id=pde2008{ _}E000247 doi: 10.1057/9780230226203.1182.
  26. Weibull, J. W. (1997). Evolutionary Game Theory. Cambridge, MA: MIT.Google Scholar
  27. White, R. W. (1985). Transitions to chaos with increasing system complexity: The case of regional industrial systems. Environment and Planning A, 17, 387–396.CrossRefGoogle Scholar

Copyright information

© Springer-Verlag Berlin Heidelberg 2010

Authors and Affiliations

  • Pasquale Commendatore
    • 1
    Email author
  • Ingrid Kubin
  • Carmelo Petraglia
  1. 1.Dipartimento di Teoria Economica e ApplicazioniUniversità di NapoliNapoliItaly

Personalised recommendations