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    A multi-sector model of relatedness, growth and industry clustering

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    Authors
    Bond-Smith, Steven
    McCann, Philip
    Date
    2019
    Type
    Journal Article
    
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    Citation
    Bond-Smith, S. and McCann, P. 2019. A multi-sector model of relatedness, growth and industry clustering. Journal of Economic Geography.
    Source Title
    Journal of Economic Geography
    DOI
    10.1093/jeg/lbz031
    ISSN
    1468-2702
    Faculty
    Faculty of Business and Law
    School
    Bankwest-Curtin Economics Centre
    URI
    http://hdl.handle.net/20.500.11937/79808
    Collection
    • Curtin Research Publications
    Abstract

    This article builds an understanding of regional innovation specialisation by developing a multi-sector model with endogenous growth through quality improving innovations and spillovers from related technologies. The model provides an approach to incorporate the relatedness literature within the mainstream theoretical frameworks of endogenous growth and economic geography. Each firm’s technology sector and the location of other firms play a role in each firm’s ability to improve its own technology. As a result, firms prefer to co-locate in technologically compatible clusters. Without relying on scale assumptions, the model for the first time coherently links related variety knowledge spillovers to mainstream urban economic frameworks and demonstrates that clustering is possible in both core and peripheral areas.

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