Nursery Cities: Urban diversity, process innovation, and the life-cycle of products

Gilles Duranton and Diego Puga

Working Papers from University of Toronto, Department of Economics

Abstract: This paper develops microfoundations for the role that diversified cities play in fostering innovation. A simple model of process innovation is proposed, where firms learn about their ideal production process by making prototypes. We build around this a dynamic general-equilibrium model, and derive conditions under which diversified and specialised cities coexist. New products are developed in diversified cities, trying processes borrowed from different activities. On finding their ideal process, firms switch to mass production and relocate to specialised cities where production costs are lower. We find strong evidence of this pattern in establishment relocations across French employment areas 1993-1996.

Keywords: nursery cities; diversity; specialisation; innovation; learning, life-cycle (search for similar items in EconPapers)
JEL-codes: D83 O31 R30 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2000-01-11
New Economics Papers: this item is included in nep-dev
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Citations: View citations in EconPapers (9)

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https://www.economics.utoronto.ca/public/workingPapers/nursery.pdf Main Text (application/pdf)

Related works:
Journal Article: Nursery Cities: Urban Diversity, Process Innovation, and the Life Cycle of Products (2001)
Working Paper: Nursery Cities: Urban Diversity, Process Innovation and the Life-Cycle of Products (2000)
Working Paper: Nursery Cities: Urban Diversity, Process Innovation, and the Life-Cycle of Products (2000)
Working Paper: Nursery cities: urban diversity, process innovation and the life-cycle of products (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:tor:tecipa:dpuga-00-01

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