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Regional Knowledge Spaces: The Interplay of Entry-Relatedness and Entry-Potential for Technological Change and Growth

Dieter Kogler (), Ronald Davies (), Changjun Lee and Keungoui Kim

Open Access publications from School of Economics, University College Dublin

Abstract: This paper aims to uncover the mechanism of how the network properties of regional knowledge spaces contribute to technological change from the perspective of regional knowledge entry-relatedness and regional knowledge entry-potential. Entry-relatedness, which has been previously employed to investigate the technology evolution of regional economies, is advanced by introducing a knowledge gravity model. The entry-potential of a newly acquired regional specialisation has been largely ignored in the relevant literature; surprisingly given the high relevance that is attributed to the recombination potential of new capabilities. In other words, just adding new knowledge domains to a system is not sufficient alone, it really depends on how these fit into the existing system and thus can generate wider economic benefits. Based on an empirical analysis of EU Metro and non-Metro regions from 1981 to 2015, we find that entry-relatedness has a significant negative association with novel inventive activities, while entry-potential has a significant positive association with the development of novel products and processes of economic value. This highlights that regions’ capacity to venture into high-potential areas of technological specialization in the knowledge space outperforms purely relatedness driven diversification that is frequently promoted in the relevant literature.

Keywords: Regional knowledge space; Entry-relatedness; Entry-potential; Technological change; Economic growth; Patent analysis (search for similar items in EconPapers)
JEL-codes: O31 O33 R11 (search for similar items in EconPapers)
Date: 2021-09
New Economics Papers: this item is included in nep-geo, nep-ino, nep-knm, nep-tid and nep-ure
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