Agglomeration and regional growth policy: externalities versus comparative advantages

Argentino Pessoa

The Annals of Regional Science, 2014, vol. 53, issue 1, 27 pages

Abstract: This paper explores the existence of different types of static and dynamic externalities and shows the relationship between externalities, interregional trade, and cluster policy. By guiding policy in choosing the most appropriate strategy for facing some frequent dilemmas, this paper has clear implications in regional development policy and adds to the existent literature in three ways. First, it contributes to a better characterization of dynamic externalities by extending the “advantages of backwardness” approach, formerly developed to explain the catching-up of national economies, to the regional context. Second, the paper presents a new model that relates static and dynamic externalities to the clustering mode of production in the regional context. Third, the paper contributes to give a more accurate theoretic basis to the regional cluster policy and to help policy-makers in choosing the right policy for increasing the well-being of depressed regions. The major conclusion is that policy must pursue a combination of the comparative advantage principle with one type of dynamic externalities uncovered in this paper: the “related variety benefits” of agglomeration. Copyright Springer-Verlag Berlin Heidelberg 2014

Keywords: O25; O33; O41; R12; R13; R58 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

Downloads: (external link)
http://hdl.handle.net/10.1007/s00168-014-0625-1 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:anresc:v:53:y:2014:i:1:p:1-27

Ordering information: This journal article can be ordered from
http://link.springer.com/journal/168

DOI: 10.1007/s00168-014-0625-1

Access Statistics for this article

The Annals of Regional Science is currently edited by Martin Andersson, E. Kim and Janet E. Kohlhase

More articles in The Annals of Regional Science from Springer, Western Regional Science Association Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().