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on Economic Geography |
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Issue of 2026–08–31
fifteen papers chosen by Andreas Koch, Institut für Angewandte Wirtschaftsforschung |
| By: | Han Chu; Jingxuan Gui; Robert Hassink; Xiaomian Dai |
| Abstract: | Since its launch in 2006, evolutionary economic geography (EEG) has been successfully expanding into the main paradigm of economic geography proper. Such rapid expansion of a paradigm might have negative consequences, as it can potentially lead to conceptual and paradigmatic stretching. Such stretching can lead to the dilution of the original paradigmatic meanings and hence fuzziness, weakening explanatory power. With the help of a bibliometric analysis and literature review, this study maps the expansion and evolutionary trajectory of EEG, examines whether this expansion predominantly takes the form of stretching or the more cumulative processes of focusing and extension, and identifies the substantive characteristics of these three forms of paradigmatic evolution. We find that EEG remains a highly vibrant paradigm: most of its literature contributes through focusing and extension by consolidating or further developing its theoretical mechanisms. Stretching has increased but remains less prominent. |
| Keywords: | evolutionary economic geography, paradigm, expansion, focusing, extension, stretching |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:egu:wpaper:2617 |
| By: | Sitian Liu; Yichen Su |
| Abstract: | Research activity generates highly localized positive spillovers, yet in the U.S. it has become increasingly spatially misaligned with population and economic activity as people moved away from legacy cities where major research institutions remain anchored. Reallocating researchers toward population centers could broaden local access to knowledge but may reduce knowledge production if legacy institutions or large research clusters raise researcher output. The spatial reallocation of researchers therefore entails a trade-off between gains in knowledge access and losses in knowledge production. To quantify the knowledge production loss from reallocation, we use bibliographic data to separate individual effects from location effects and show that location effects account for substantial differences in research output across locations. Our instrumental-variables estimates provide robust evidence of own-institution agglomeration effects but weaker evidence of external-cluster effects. We then incorporate these estimates into counterfactual reallocations and show that marginally reallocating researchers toward large metropolitan areas with relatively little research activity can plausibly raise aggregate output because the associated knowledge production losses are modest and can be offset by small access gains. |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2608.15981 |
| By: | D’Alessandro, Francesco; Santarelli, Enrico; Vivarelli, Marco |
| Abstract: | This study examines how regional technological relatedness and local AI knowledge influence regional innovative activity, as measured by patenting activity. Using a novel three-way longitudinal dataset (670 four-digit CPC classes × 302 NUTS-2 regions × nine four-year periods, 1986–2021) and leveraging a deep learning-based identification of AI patents, we show that two broad mechanisms operate in parallel. First, in accordance with the extant literature, technologies that are cognitively close to a region’s existing patent portfolio enjoy higher patenting activity, confirming that relatedness remains a strong and persistent predictor of innovative output. Second, local AI endowments are positively associated with patenting across technological fields, even after conditioning on relatedness, indicating that AI plays an enabling and cross-cutting role in a given regional innovation system. Moreover, the interaction between relatedness and AI turns out to be negative and statistically significant, implying that AI attenuates the extent to which local innovative efforts depend on the technology’s proximity to the regional portfolio. In sum, AI appears to enhance overall local innovative activity while reducing its reliance on pre-existing regional knowledge structures. |
| Keywords: | Artificial intelligence, AI, regional innovation, relatedness, Technological change |
| JEL: | O31 R11 |
| Date: | 2026–08–20 |
| URL: | https://d.repec.org/n?u=RePEc:unm:unumer:2026012 |
| By: | Zoltan Elekes; Sandor Juhasz; Gergely Magyar; Balazs Lengyel; Gergo Toth |
| Abstract: | Regional industry clusters enhance firm performance, yet the geography of firm-to-firm transactions underlying this advantage remains unclear. Using nationwide supplier-buyer and labour-flow networks constructed from Hungarian administrative data, we examine how the spatial reach of cluster and non-cluster firms’ supplier, customer, and labour connections relates to firm performance. We find that greater geographic reach in both networks is associated with better firm performance. Among cluster firms, better-performing firms reach more distant customers while drawing from more geographically proximate labour markets. Our findings reveal that the spatial structure of inter-firm networks is a key source of the cluster premium. |
| Keywords: | supply chains, production networks, labour flows, regional clusters, firm performance |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:egu:wpaper:2613 |
| By: | Adi Weidenfeld; Tom Broekel; Nick Clifton |
| Abstract: | The Regional Innovation Systems (RIS) framework explains regional innovation performance primarily through structural conditions and external knowledge flows. While this perspective has generated influential typologies and policy models, it offers limited insight into how RISs emerge and transform from within. This paper advances a dynamic perspective that conceptualises RIS development as a continuum from fragmented interaction to systemic integration. We argue that generative network mechanisms and systemic dimensions co-evolve recursively, enabling or constraining the formation of integrated RISs. By shifting attention from static structures to self-reinforcing dynamics, the framework provides a foundation for understanding RIS formation, transformation, and reversibility, and suggests a more adaptive, mechanism-oriented approach to policy. |
| Keywords: | regional knowledge networks, regional innovation systems, network evolution, evolutionary economic geography, institutions |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:egu:wpaper:2614 |
| By: | Jantos, Louisa; Bizer, Kilian |
| Abstract: | Regional innovation systems (RIS) and challenge-oriented regional innovation systems (CORIS) represent competing ideal types along a continuum from market-driven to sustainability-oriented innovation governance. Yet how these ideal types manifest empirically, and what forms of system-level agency emerge across this continuum, remains largely unexamined. Drawing on 47 semi-structured expert interviews in Zurich and Helsinki - two European innovation leaders selected through a most different systems design - and analysed through an inductive-deductive thematic coding approach, this paper shows that neither case conforms neatly to either ideal type. Both cities occupy intermediate positions on the RIS-CORIS continuum, with Zurich exhibiting a market-driven logic in which sustainability is contingent on economic viability, and Helsinki a challenge-oriented configuration in which economic development remains a constitutive co-goal. System-level agency operates through fundamentally different mechanisms in each case: resource mobilization through contractual arrangements in Zurich, and the active construction of institutional rationales in Helsinki. Despite these differences, both cases achieve comparable levels of regional innovation capacity - a finding consistent with equifinality across the continuum. Two shared structural limitations are identified: a persistent science-policy translation gap and multi-scalar governance dependencies that constrain regional actors regardless of system orientation. These findings advance the empirical understanding of hybrid RIS configurations and carry direct implications for regions seeking to reconfigure their innovation systems towards challenge orientation. |
| Abstract: | Regionale Innovationssysteme (RIS) und herausforderungsorientierte regionale Innovationssysteme (CORIS) bilden zwei konkurrierende Idealtypen. Sie spannen ein Kontinuum zwischen marktgetriebenem und nachhaltigkeitsorientiertem Innovationsmanagement auf. Wie diese Idealtypen empirisch auftreten und welche systemische Handlungsfähigkeit dabei entsteht, ist bislang kaum untersucht. Die Studie basiert auf 47 halbstrukturierten Experteninterviews in Zürich und Helsinki. Beide Städte wurden als europäische Innovationsführer mit möglichst unterschiedlichen Systemdesigns ausgewählt. Die Analyse erfolgte mittels eines induktiv-deduktiven Kodierungsansatzes. Ergebnis: Keine der beiden Städte entspricht einem der Idealtypen eindeutig. Beide nehmen Zwischenpositionen ein. Zürich folgt einer marktgetriebenen Logik, in der Nachhaltigkeit von wirtschaftlicher Tragfähigkeit abhängt. Helsinki zeigt eine herausforderungsorientierte Konfiguration, in der wirtschaftliche Entwicklung ein konstitutives Nebenziel bleibt. Systemische Handlungsfähigkeit funktioniert in beiden Fällen unterschiedlich. Zürich setzt auf Ressourcenmobilisierung durch vertragliche Vereinbarungen. Helsinki konstruiert aktiv institutionelle Begründungsrahmen. Dennoch erreichen beide Städte ein vergleichbares Niveau regionaler Innovationskapazität - ein Hinweis auf Äquifinalität entlang des Kontinuums. Zwei strukturelle Einschränkungen treten in beiden Fällen auf: eine anhaltende Lücke zwischen Wissenschaft und Politik sowie mehrskalige Governance-Abhängigkeiten. Beide begrenzen regionale Akteure unabhängig von ihrer Systemausrichtung. Die Befunde haben direkte Implikationen für Regionen, die ihre Innovationssysteme in Richtung Herausforderungsorientierung umgestalten möchten. |
| Keywords: | Regional Innovation System, Challenge-Oriented Innovation System, System-Level Agency, Innovation, Sustainability |
| JEL: | O31 R58 R11 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifhwps:342484 |
| By: | Jantos, Louisa; Dekker, Thekla; Bizer, Kilian |
| Abstract: | Institutions shape the conditions under which entrepreneurship and innovation unfold, yet how their degree of openness mediates sustainability-oriented development trajectories remains systematically underexplored. Drawing on 98 expert interviews across four high-performing European innovation regions, Helsinki, Copenhagen, Stockholm, and Zürich, we develop and empirically ground a multi-dimensional framework of institutional openness as a dynamic regional capacity. Our findings reveal that institutional density is a necessary but insufficient condition for sustainability-oriented regional development: what matters equally is institutional permeability-the table to which regional configurations remain open to external actors, knowledge, and alternative development trajectories. Helsinki's highly integrative configuration stands in marked contrast to Zürich's more fragmented one, with Copenhagen and Stockholm occupying distinct intermediate positions. The interaction between formal and informal institutional dimensions, and the underappreciated role of intermediary organizations, critically determines whether regions can redirect entrepreneurship and innovation toward sustainability goals. We derive implications for place-based innovation policy. |
| Abstract: | Institutionen prägen die Bedingungen, unter denen Unternehmertum und Innovation entstehen, doch wie ihr Grad an Offenheit nachhaltigkeitsorientierte Entwicklungspfade beeinflusst, ist bislang systematisch untererforscht. Auf der Grundlage von 98 Expert*inneninterviews in vier leistungsstarken europäischen Innovationsregionen - Helsinki, Kopenhagen, Stockholm und Zürich - entwickeln und verankern wir empirisch einen mehrdimensionalen Rahmen institutioneller Offenheit als dynamische regionale Kapazität. Unsere Ergebnisse zeigen, dass institutionelle Dichte eine notwendige, aber nicht hinreichende Bedingung für nachhaltigkeitsorientierte Regionalentwicklung ist. Ebenso entscheidend ist institutionelle Permeabilität, das Ausmaß, in dem regionale Konfigurationen gegenüber externen Akteur*innen, Wissen und alternativen Entwicklungspfaden offen bleiben. Helsinkis hochintegratives Institutionengefüge steht in deutlichem Kontrast zu Zürichs stärker fragmentierter Konfiguration, während Kopenhagen und Stockholm jeweils eigenständige Zwischenpositionen einnehmen. Das Zusammenspiel formaler und informaler institutioneller Dimensionen sowie die unterschätzte Rolle von Intermediärsorganisationen bestimmen maßgeblich, ob Regionen Unternehmertum und Innovation auf Nachhaltigkeitsziele ausrichten können. Wir leiten daraus Implikationen für eine ortsbezogene Innovationspolitik ab. |
| Keywords: | Institutional Openness, Institutional Theory, Sustainable Entrepreneurship, Sustainable Regional Development |
| JEL: | O31 O32 R11 R58 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifhwps:342483 |
| By: | Schwarzbauer, Wolfgang; Gillesberger, Michael; Perschke, Simon |
| Abstract: | Regional economic resilience, the capacity of regions to absorb and recover from external shocks, has gained renewed attention in light of recent crises. This paper examines how different forms of economic diversity shaped the resilience of European regions during the Global Financial Crisis of 2008/09. We distinguish between gross export diversification, value-added export diversification, and domestic sectoral diversity, thereby capturing both external and internal dimensions of economic structure. Our results show that regions with more diversified industrial structures and value-added export linkages experience significantly smaller output losses during the initial downturn. In contrast, the recovery phase is primarily driven by specialization in industrial activities and regional innovation capacity, which facilitate faster postcrisis adjustment. These findings remain robust when accounting for spatial spillovers across regions. Combining gross and value-added trade measures with regional industrial structures, this study provides novel evidence on the distinct channels through which diversity affects resilience. The results highlight a trade-off between short-term shock absorption and the speed of recovery, with important implications for regional development strategies and crisis preparedness. |
| Abstract: | Wirtschaftliche Krisen wirken sich sehr unterschiedlich auf Regionen aus. Während einige Regionen starke Einbrüche verzeichnen, zeigen andere eine höhere Widerstandsfähigkeit und erholen sich schneller. Die Ursachen dieser Unterschiede sind insbesondere vor dem Hintergrund jüngster globaler Krisen von wachsender Bedeutung. Diese Studie untersucht, wie verschiedene Formen wirtschaftlicher Diversifikation die Resilienz europäischer Regionen während der globalen Finanzkrise 2008/09 beeinflusst haben. Dabei unterscheiden wir zwischen Branchen-Diversifikation, Exportdiversifikation und der Einbindung in globale Wertschöpfungsketten. So können sowohl interne Wirtschaftsstrukturen als auch externe Handelsverflechtungen berücksichtigt werden. Die Ergebnisse zeigen, dass Regionen mit einer breiteren Branchen-Basis besser gegen wirtschaftliche Schocks geschützt sind. Eine diversifizierte Wirtschaftsstruktur und stärkere Verflechtungen entlang der Wertschöpfungsketten tragen dazu bei, negative Auswirkungen abzufedern und Produktionsrückgänge zu begrenzen. Dagegen sind stark spezialisierte Regionen - insbesondere in der Produktion - stärker von Einbrüchen der externen Nachfrage betroffen. Dieser Stabilisierungsvorteil geht jedoch mit einem Zielkonflikt einher. Diversifikation erleichtert zwar die Abfederung von Krisen, führt aber nicht automatisch zu einer schnelleren Erholung. Vielmehr sind es spezialisierte Regionen - insbesondere geprägt durch industrielle Produktion - sowie eine hohe Innovationsfähigkeit, die eine raschere Anpassung und Erholung erfahren. Darüber hinaus zeigt die Analyse die Bedeutung räumlicher Verflechtungen. Wirtschaftliche Schocks und Erholungsprozesse verbreiten sich über regionale Produktionsnetzwerke, bleiben jedoch weitgehend innerhalb nationaler Grenzen. Dies unterstreicht die Rolle institutioneller und wirtschaftspolitischer Rahmenbedingungen auf nationaler Ebene. Insgesamt weisen die Ergebnisse auf einen grundlegenden Zielkonflikt hin: Diversifikation erhöht die Stabilität in Krisenzeiten, während Spezialisierung eine schnellere Erholung begünstigt. Daraus ergeben sich wichtige Implikationen für die regionale Wirtschaftspolitik, da keine einheitliche Strategie zur Förderung von Resilienz ableitbar ist. |
| Keywords: | regional economics, economic resilience, export diversification, multi-regional input-output model, global value chains, Financial Crisis 2008 |
| JEL: | R11 R15 F15 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ecoarp:342493 |
| By: | Tim Sargent |
| Abstract: | This paper looks at the regional economic and political structure of the UK and Canada, and how these have evolved over time. We look at the regional distribution of industries in both countries, noting both differences and similarities across the two countries, and look at each country’s experience with regional economic development policy and political decentralization over the last fifty years or so. We outline the current structure of economic development programming in Canada, at both the federal and provincial level, as well as programmes by the federal government that target specific sectors. We then look at the outcomes of regional economic development in Canada, which we find to be mixed at best. Finally, we draw out lessons for UK policymakers from the Canadian experience. These include the perceived need for an enduring central government role in regional development, however much political devolution takes place, the importance of political representation for economic development institutions, the tendency to uniformity despite political decentralization, and the existence of some innovative Canadian economic development programmes that bear watching. |
| Keywords: | regional economic policy, UK, Canada, regional development, decentralization, productivity, political economy |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:sls:resrep:2501 |
| By: | Giroud, Xavier; Liu, Ernest; Mueller, Holger |
| Abstract: | The vast majority of U.S. inventors work for firms that also have inventors and plants in other tech clusters. Using merged USPTO–U.S. Census Bureau plant-level data, we show that larger tech clusters not only make local inventors more productive but also raise the productivity of inventors and plants in other clusters, which are connected to the focal cluster through their parent firms' networks of innovating plants. Cross-cluster innovation spillovers do not depend on the physical distance between clusters, and plants cite disproportionately more patents from other firms in connected clusters, across large physical distances. To rationalize these findings, and to inform policy, we develop a tractable model of spatial innovation that features both within- and cross-cluster innovation spillovers. Based on our model, we derive a sufficient statistic for the wedge between the social and private returns to innovation in a given location. Taking the model to the data, we rank all U.S. tech clusters according to this wedge. While larger tech clusters exhibit a greater social-private innovation wedge, this is not because of local knowledge spillovers, but because they are well-connected to other clusters through firms' networks of innovating plants. In counterfactual exercises, we show that an increase in the interconnectedness of U.S. tech clusters raises the social-private innovation wedge in (almost) all locations, but especially in tech clusters that are large and well-connected to other clusters. |
| Keywords: | Innovation |
| JEL: | O31 R30 G30 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19206 |
| By: | Dieter F. Kogler; Keungoui Kim |
| Abstract: | Evolutionary Economic Geography (EEG) has become a central perspective within contemporary Economic Geography by explaining how regions, cities, industries, firms, technologies, and institutions evolve over historical time. This chapter introduces EEG’s intellectual foundations in evolutionary economics, Schumpeterian ideas of innovation and creative destruction, and geographical debates on uneven development, path dependence, and regional transformation. It reviews the field’s core conceptual contributions around history, novelty, complexity, emergence, and adaptability, and shows how these ideas have informed empirical research on related variety, regional branching, technological knowledge spaces, networks, resilience, path development, institutions, and policy. The chapter argues that EEG is best understood not as a closed paradigm, but as an evolving and plural research programme. Its future relevance depends on explaining not only how inherited capabilities shape regional trajectories, but also how capabilities, relatedness, and path dependence are produced, activated, selected, contested, and transformed. In doing so, EEG offers a powerful framework for understanding how economic landscapes inherit the past, generate novelty, and confront uncertain spatial, technological, social, and ecological futures. |
| Keywords: | Evolutionary Economic Geography; Regional Diversification; Path Dependence; Knowledge Spaces; Uneven Development |
| JEL: | R11 O33 O18 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:egu:wpaper:2619 |
| By: | Ketevani Kapanadze; Mariola Pytlikova |
| Abstract: | In response to COVID-19, Schengen countries temporarily reintroduced internal border controls, disrupting cross-border integration. Using this policy change as a natural experiment and monthly nighttime lights data, we estimate the short-run effects on European municipalities. Municipalities along internal Schengen borders experienced a 3-4% decline in economic activity relative to interior municipalities, with larger estimated effects when external-border municipalities form the comparison group. Losses were greater in smaller and less densely populated municipalities and along economically asymmetric East-West borders, whereas municipalities along more economically similar borders generally experienced smaller declines. The effects also depended on the pre-pandemic purpose of cross-border mobility: higher shares of work- and business-related travel, services, and shopping were associated with larger losses, while the results for leisure and social mobility are consistent with greater scope for domestic reallocation of activity. Overall, the findings show that the local consequences of internal border closures depend on municipality characteristics, cross-border economic asymmetries, and the purpose of mobility. |
| Keywords: | Border closures; Cross-border mobility; Schengen Area; Nighttime lights; Local economic activity; Border regions; COVID-19; European integration |
| JEL: | R11 R12 R23 F15 F22 C21 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:26218 |
| By: | Amrit Amirapu; Malavika Thirumalai Ananthakrishnan; Alex Klein |
| Abstract: | This paper examines the role of agglomeration economies in shaping patterns of industrial coagglomeration in post-liberalisation India. Using granular, establishment-level data from a 2005 census of all non-farm establishments, we estimate the relative importance of two Marshallian channels of agglomeration economies -- input-output linkages and labour market pooling -- in determining which industries locate together. To address concerns regarding endogeneity and measurement error we employ instrumental variables based on U.S. industrial data. We find large effects for both Marshallian channels -- substantially larger than those the previous literature has found for advanced economies. By contrast, natural advantages appear less influential, though this may reflect measurement challenges. We also find that the two channels operate at distinct geographic scales: inputoutput linkages are similarly influential at both the district level and at the level of individual towns and villages, while labour market pooling effects appear more localized, as they are strongest at the town/village level. This pattern holds both in the full sample and within manufacturing alone. Our study is among the first detailed empirical assessments of coagglomeration patterns in a developing country, thus offering insights into the economic forces that shape spatial inequalities in such contexts. |
| Keywords: | coagglomeration; agglomeration economies; Marshallian externalities; input-output linkages; labour market pooling; India |
| JEL: | R12 R32 R23 O14 O18 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:ukc:ukcedp:2604 |
| By: | Wallace Patrick Santos de Farias Souza (Universidade Federal da Paraíba); Fernando Salgueiro Perobelli (Universidade Federal de Juiz de Fora); Eduardo Amaral Haddad (Universidade de São Paulo) |
| Abstract: | Regional interdependence can be measured through different approaches. This paper applies a systemic analysis based on intersectoral linkages, using the hypothetical extraction method. To build a regional hierarchy of interdependence, each of Peru’s 26 regions is extracted one at a time. The analysis uses an interregional input-output matrix calibrated for 2022, with 101 productive activities and 26 regions. The results reveal a highly concentrated regional structure. Lima Metropolitan Region emerges as the main economic core, generating the largest backward, forward and total effects, followed by Callao, Ica, Arequipa and Cusco. In contrast, several Amazonian and Andean departments show weaker systemic impacts, reflecting limited integration into national production chains. The evidence points to a core-periphery pattern in which Lima and nearby coastal departments concentrate income, population, employment and productive linkages. These findings highlight the need for regional policies that reduce excessive dependence on Lima and strengthen endogenous development in peripheral territories. |
| Keywords: | regional interdependence; hypothetical extraction; input-output analysis; regional inequality; Peru |
| JEL: | R11 R15 O18 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ris:nereus:023543 |
| By: | Treb Allen; Simon Fuchs; Woan Foong Wong |
| Abstract: | How do we evaluate the welfare gains from transport infrastructure investment? We present a quantitative spatial framework that integrates traffic and economic responses to infrastructure improvements and derives the elasticity of aggregate welfare to changes in the transportation network. The resulting formula extends the traditional ``social savings'' method to incorporate route and mode choice, agglomeration and dispersion externalities, and traffic congestion. We apply the formula to the U.S. freight network and assess the benefits of reducing costs on each segment of the U.S. Interstate Highway System. The traditional and extended measures are closely related overall, but they differ in the level of estimated gains and in the ranking of some highly valued links. Where the rankings differ, network position determines how congestion and spatial adjustment alter a link's measured benefit. |
| JEL: | F1 R1 R4 R42 |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35599 |