Agglomeration, Industrial Policy and the New Economic Geography: A Possible Synthesis

Ivano Dileo and Francesco Losurdo

L'industria, 2011, issue 3, 455-468

Abstract: The New Economic Geography explained spatial concentration of the economic activities through the agglomeration concept, i.e. through self-reinforcing mechanisms created and sustained by the market. But it didn't deepen its policy implications. This suggests there cannot be only an agglomeration model or a set of rules that leads to the agglomeration because the market selects according to the economic benefit and territorial quality, i.e. according to the factors endowment. So, a holistic industrial policy is required because there are stronger and weaker areas which coincide with a different dynamic uncertainty. Concluding, agglomeration - in the meaning of the NEG - can be considered as a benchmarking tool in a macro holistic policy, which regards sectoral and factors micro policies and micro-territorial ones. In this paper we try to give an answer to these issues by using industrial policy as «macro-policy», i.e. including other micro policies like the regional one.

Keywords: Agglomeration, Industrial Policy, New Economic Geography, L520; R100; R300. (search for similar items in EconPapers)
Date: 2011
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