Networks and regional economic growth: A spatial analysis of knowledge ties

Abstract

In recent years, increased attention has been given to role of inter-organisational knowledge networks in promoting regional economic growth. Nevertheless, the empirical evidence base concerning the extent to which inter-organisational knowledge networks influence regional growth is at best patchy. This article utilises a panel data regression approach to undertake an empirical analysis of economic growth across regions of the UK. Drawing on the concept of network capital, significant differences in the stocks of network capital and flows of knowledge within and across regions are found, which are significantly associated with regional rates of economic growth. The analysis finds that both inter and intra-regional networks shape regional growth processes, highlighting the role of both embedded localised linkages and the importance of accessing more geographically distant knowledge. The study adds weight to the suggestion that one of the most interesting implications of endogenous growth theory relates to the impact of the spatial organisation of regions on flows of knowledge. It is concluded that the adoption of a relational approach to understanding differing economic geographies indicates that network systems are a key component of the regional development mix.