Evolutionary Economic Geography Research Articles

The role of legitimation and delegitimation in new path development in tourism

The development of the tourism industry in regional contexts has attracted significant interest from tourism geographers, in which the evolutionary economic geography (EEG) approach has been of interest over the last decade. Recent research on EEG has emphasised the role of institutions and particularly legitimacy in new path development, claiming that legitimacy is crucial for the development of emerging industries. Against this backdrop, this paper explores the role of legitimation and delegitimation in the development of the sharing economy in Innlandet, a tourism region in Norway. The article poses two research questions. How is the legitimacy of Airbnb expressed by key tourism stakeholders in a tourism region in Norway? Moreover, how can the shifting roles of legitimation and delegitimation among key stakeholders in the tourism industry inform the literature on new path development? These issues are explored in qualitative interviews with respondents from four key tourism stakeholder groups: consumers, Airbnb hosts, incumbent firms, and regional industry and policy actors. The findings reveal legitimacy issues mainly related to regulatory and normative ambiguities, described by biased regulations that result in economic leakages to other regions and countries and concerns about decreasing local value creation in the region. These findings indicate that the sharing economy lacks legitimacy among the stakeholders. The article concerns the role of legitimation and delegitimation in new path development processes, arguing that delegitimation prevents transformative changes and path development processes.

Making history matter more in evolutionary economic geography

AbstractOur focus in this paper is on a somewhat curious feature of evolutionary economic geography, namely that although concerned withevolution – with processes ofhistoricalchange and transformation – evolutionary economic geography seems not to take history as seriously as it would be expected to do. We argue that evolutionary economic geography is inescapably an historical social science, and that as such would benefit from exploring the different ways in which history can be used in causal investigation, from problematising the different temporalities of economic change and transformation, and from giving more attention to appreciative theorising and narrative case study over variable-centred approaches.

The role of powerful incumbent firms: shaping regional industrial path development through change and maintenance agency

ABSTRACT This article seeks to advance perspectives on powerful incumbent firms in (new) regional industrial path development. Drawing on recent insights from transition studies, it is argued that this actor group – hitherto often portrayed in a rather one-sided manner – plays a crucial role in shaping the pace and direction of regional path development through agency oriented towards both change and maintenance. Building on systemic perspectives at the intersection of evolutionary economic geography and innovation studies, a particular emphasis is placed on incumbent firms’ interventions to reconfigure or stabilize their surrounding regional innovation system to support their intentions. To this end, this article examines how incumbents exert their influence through various forms of power as means by which they promote or hinder regional industrial change. Empirically, the role of incumbent firms in three traditional automotive regions in Austria is investigated. It is shown how they leverage their power to propel the industry’s digitalization and suppress its decarbonization.

Natural resources, (Mis)governance, and the lack of diversification in mining regions: A reconsideration of the Dutch disease at a local level

This paper aims to refine the understanding of the resource movement effect of the Dutch disease at a local level by (1) broadening the focus to include access to natural resources and (2) considering the local role of institutions as a channel for this effect. We propose an expanded theoretical approach to evolutionary economic geography on interpath dynamics, considering the role of local institutions in access to scarce assets by integrating the conceptualization of governance structures provided by transaction cost economics. This proposed framework is applied to a case study of Calama, located within the hyper-arid Atacama Desert in the Antofagasta region of northern Chile. The case demonstrates how local inequities in access to freshwater increased permanently due to the Chilean 1981 Water Code in correlation with a temporal copper price super cycle. The results reveal how the mining sector and indigenous associations concentrated access to water rights originally inscribed in irrigation canals by small farmers through a market governance structure, constraining economic diversification through negative interpath dynamics. This research denotes the importance of considering institutional bottom-up approaches to overcome resource dependency.

Is industrial related variety an enabling condition for regional entrepreneurship? A comparison between mining and non-mining regions in Chile

A central question in Evolutionary Economic Geography is why regions differ in their ability to diversify and thus retain or expand their competitive position. Economic geography has generally tackled this question linking initial regional industrial structures with the emergence of new economic specializations. In this article, we argue that entrepreneurship is a key and largely overlooked mechanism of regional diversification, which has been shown to be eased by industrial related variety, but at the same time dampened by the weak linkages between the mining industry and the local economy. We analyze whether related variety is an enabling condition for entrepreneurship in mining regions. Using an unbalanced panel of around 187,000 new firms created between 2005 and 2011 in Chile, we show that related variety favors new firms’ creation, sales, and employment in non-mining regions, but not in mining regions. The results indicate that, due to the absence of pro-entrepreneurship effects of a relatedly-varied structure, mining regions face particularly challenging conditions for an entrepreneurship-based diversification process. Place-based policies attracting external knowledge, reinforcing territorial embeddedness of mining assets, and strengthening local absorptive capacity can help creating new development paths in mining regions driven by local entrepreneurs.

New path capture. Insights from the diversification process in mining regions

Current literature on regional diversification emphasizes the importance of nonlocal linkages for new path development in peripheral regions. This is particularly relevant in mining areas due to the risk of technological lock-in caused by their high specialization in extractive activity. We combined the Evolutionary Economic Geography and Global Production Networks frameworks and suggested the notion of “path capture” to critically assess the prospects of benefiting from path creation by extensive nonlocal linkages in a peripheral region. To understand new path capture, we conducted a case study on Antofagasta, the main mining region in Chile, with a multiscalar perspective. The primary data in our analysis were obtained from in-depth interviews and the secondary data were retrieved from diverse sources. Our results show that mining regions face the risk of creating new paths that are not territorially embedded but captured by external actors.

Strategic coupling, path creation and diversification: Oil-related development in the ‘Straits Region’ since 1959

A growing body of literature in evolutionary economic geography (EEG) and global production networks (GPN) have pointed out the role of institutions in addressing questions of subnational regional path creation and uneven development. Through a synthesis of the EEG and GPN approaches, this paper proposes a framework to highlight the roles and functions performed by state-linked actors in the diversification and path creation. The trajectory of mid-stream oil-related development in Singapore and the wider Straits region since 1959 was used to illustrate how the state implements its industrial strategies and policies through different forms of state and state-linked actors over time, which in turn generates a symbiotic state-business relation for related diversification and subsequent coupling-recoupling-decoupling and path creation dynamics. Specifically, the establishment of oil-related business in Singapore (a city state without oil reserves) was examined through the instrumental roles and functions performed by various state-linked actors on the establishment of structural coupling with TNCs on oil storage facilities between 1959 and 1986, and then functional coupling with TNCs on oil and commodities trading between 1987 and 1997 before decoupling the lower value-added oil storage businesses and developing as a regional energy trading hub since 1998.

Evolutionary dynamics and purposeful design: The case of the Margaret River Region, Australia

Transformations of tourism destinations can be considered under several lenses. One lens refers to the degree of controllability and of purposeful steering of these transformations. The increasing discourse about tourism design, ranging from experience design and atmospheric design to destination design, implies that tourism destinations and their experiences can be created. Such approaches assuming higher degrees of controllability clash with concepts such as evolutionary economic geography. Looking at the development and historical transformations of the Margaret River Region in Western Australia, this paper combines document research, ethnographic observations and semi-structured interviews to investigate the evolutionary dynamics and purposeful interventions into the development of tourism destinations. The case study finds that historically some developments have happened incidentally (e.g., hippie movement) and others, while being of a designed nature (e.g., viticulture), were not planned with a primary tourism focus. Therefore, the case study analysis urges caution in over-emphasizing the possibility of comprehensive destination designs. Instead, it seems necessary to balance the transformation heuristic “destination design” with descriptive notions of “destination evolution”. With this detailed case specific analysis, we advance thinking on destination development by blending two seemingly contrasting paradigms, the emergent destination design perspective and the evolutionary destination approach by suggesting an evolutionary destination design theory.

What can evolutionary economic geography learn from global value chain and global production network research on developing and emerging economies?

ABSTRACT Although evolutionary economic geography (EEG) and global production network (GPN) and global value chain (GVC) research into regional industrial restructuring and development have developed in parallel and with little mutual engagement, they provide important complementary insights. This article concentrates on what the EEG approach can learn from the GVC/GPN approach by focusing on extra-regional linkages, institutional contexts and firm heterogeneity. Analysing the role of these factors not only overcomes some weaknesses of the EEG approach but also plays an especially important role in understanding regional industrial dynamics in developing and emerging economies and in the conduct of policy-relevant research.

Global value chains from an evolutionary economic geography perspective: a research agenda

ABSTRACT The research agendas of evolutionary economic geography (EEG) and global value chains (GVCs) have developed more or less independently from each other, with little interaction so far. This is unfortunate because both streams of literature have a lot to offer each other. This paper explores how, looking at four strands in the GVC literature. Promising crossovers between EEG and the GVC literature are identified, but also some missing links that need to be taken up in future research. These new research avenues, promoting the adoption of an evolutionary perspective on GVCs, are expected to enrich both literatures in mutual ways.

Neither prepared nor transformed: Institutional responses to unconventional oil and gas development in Australian and Canadian communities

Resource dependent regions in Australia, Canada, and in other industrialized areas have experienced rapid change due to forces of both political and economic restructuring over the past three decades. Policy and program responses by senior levels of government to these accelerating processes of change have too often only exacerbated the negative impacts of major resource exploitation. As a result, rural and small-town places dependent upon primary industries and natural resource sectors continue to struggle to find traction in a new economy marked by the vagaries of demographic, economic, social, cultural, political, and environmental change. In this paper, we explore these resource economy and institutional dynamics within the context of unconventional oil and gas development (UOGD). Our comparative case context includes the Surat Basin in eastern Australia and the Peace River region in northeastern British Columbia, Canada. Both regions have significant recent experience with UOGD. The paper draws upon staples theory and evolutionary economic geography to frame the dynamics of truncated development patterns and the prospects for path variation. Despite the well-known negative impacts and disruptions associated with major resource projects, we make three inter-related arguments challenging the efficacy of senior government responses to the community and regional impacts of UOGD. These are that senior governments: 1) react too slowly in their mitigation responses; 2) are generally dragged into action by local opposition to construct institutional and redistributive funding measures to compensate for local disruption, that; 3) ultimately fall short in terms of offering any kind of strategic, post-resource boom transformational potential to restore or redirect the economic future of resource regions.

Regional preconditions to shape interpath relations across regions: two cases from the Austrian food sector

ABSTRACT Regional restructuring in the context of societal dynamics involves the development of several, possibly interacting regional industrial paths. Conceptualizations in evolutionary economic geography and innovation studies analyze the effects of relating regional industrial paths in the same regional or national context. While policy makers at EU, national and regional scales support research and development of transformative activities in different regions across countries, scholarly contributions on interpath relations across regions and the role of regional preconditions to enable paths in shaping them are scarce. This article combines recent conceptualizations of interpath relations within regions with considerations about the multi-scalarity of asset availability and modification to conceptualize interpath relations across regions. A framework is developed to explain how reinforcing or impeding effects of interpath relations across regions are related to regional preconditions. Empirically, transformative food sector innovations initiated to tackle societal challenges are investigated as an under-researched topic in the path development literature. Two case studies in a peripheral and a core region provide exemplified results about regional differences in supporting asset modification at multiple scales and demonstrate reinforcing or impeding effects for path development resulting from interpath relations across regions. The article offers policy recommendations and presents avenues for further research.

The geography of the fintech industry in China: An analysis of China’s city‐level patenting

AbstractThis article investigates the geography of the fintech industry in China's cities, which has not been systematically studied. It contributes to the literature on fintech by applying a new theoretical perspective—evolutionary economic geography. Improving on the existing literature on fintech that conducts a relatively general analysis of the role of technology in fintech development, evolutionary economic geography offers a detailed analysis that zooms in on the specific kinds of technology that determine fintech development. Moreover, this article contributes to the literature on evolutionary economic geography by systematically examining the role of market demand in developing a new industry. Based on a unique data set from 2003 to 2019, this article provides a city‐level analysis of the fintech industry in China. The results show that the fintech industry tends to develop in cities that have accumulated technologies in the fields of finance, e‐commerce, data sciences, and security. Moreover, there is a positive relationship between the development of the fintech industry and the demand for fintech services. Finally, this paper sheds light on the role of a favorable regulatory environment in fintech development.

Local development challenge in lagging-behind areas: insights from new & evolutionary economic geography.

Lagging-behind regions, as an example of the failure of convergence in a country, has attracted the attention of many researchers who are attempting to adopt applicable policies and strategies to overcome the problem of low growth paths. The present study focuses on the policy proposals in the context of new economic geography and evolutionary economic geography for lagging-behind areas. Industrial agglomeration, as an essential element of the new economic geography, has restricted the potential for policy-making in lagging-behind regions. Creating regional advantages, as a policy in evolutionary economic geography, has provided diversified policy options for lagging-behind regions. However, this approach faces multi-level challenges in lagging-behind regions, including the lack of critical mass about low diversity and the gap in the knowledge base between lagging-behind and affluent areas. Therefore, if this policy is to be the basis for creating regional objectives, it should provide a structure for simulating external knowledge links and distinguishing the nature of the various related industries.

Institutional work, regional key actors, and green industrial restructuring

ABSTRACT Departing from evolutionary economic geography, the objective of the article is to reveal the dynamics of institutional work by regional key actors with a need to achieve green restructuring in regions dependent on the oil and gas industry. The authors combine quantitative and qualitative methods to investigate how, why, and when regional stakeholders’ institutional work contributes, or not, to changing institutional logics that enable green industrial restructuring in the regional innovation systems of two adjacent petroleum-dominated regions in Norway. The main finding is that despite shared positive visions in both regions for green industrial restructuring, the processes of institutional work and related institutional logics respectively legitimize a green shift in Hordaland and delegitimize it in Rogaland. Consequently, there is a need to remain mindful of institutional work’s connection to regional and often taken-for-granted institutional logics. In conclusion, the authors argue that the findings challenge the current IW discourse within economic geography, which has tended to explain green regional industrial restructuring as outcomes of intended agency leading to successful outcomes.

Азиатская Россия – условия и препятствия поступательной диверсификации экономики макрорегиона

The paper considers the peculiarities and directions of economy diversification processes in the eastern part of Russia – the territory that stretches from the Urals to the Pacific Ocean. The processes of diversification are reviewed through the prism of not only the views and approaches developed within the framework of modern evolutionary economic geography but also institutional economics. It is shown that the state and dynamics of diversification processes in the Asian Russia are determined by the peculiarities of the transformation of the country’s economy as a whole during the transition from the system of centralized planning and management to a system based on market principles of interaction between economic agents. The role and importance of previously formed assets and implemented solutions – especially in the infrastructure sphere and previously created production structures – are extremely high. Without taking into account the peculiarities of space – the significant distances between different productions that are links in the value chain – the transformation of the economy leads to a narrowing of the spheres of economic activity and subsequent de-industrialization. According to the authors, the transition to the evolutionary process of economic diversification of the vast macroregion is impossible without a balanced public industrial policy and policy in the field of nature and subsoil use. The analysis of the processes of diversification / de-industrialization is supplemented and expanded within the framework of the cognitive analysis of possible directions and conditions affecting them. The authors offer a set of fundamental measures and steps, that allow, in their opinion, moving from ‘extra-regional’ causes of diversification to augmenting the role and importance of local and internal factors and conditions

Applying Evolutionary Economic Geography beyond case studies in the Global North: Regional diversification in Vietnam

Hitherto, the path‐dependent understanding of regional diversification in Evolutionary Economic Geography (EEG) has drawn largely on insights into industrialized countries. However, in the past few decades several regions in the Global South have undergone rapid structural transformations despite starting out with unfavourable regional asset bases. This raises the question as to whether the strong emphasis on endogenous capabilities in EEG also provides a sound theoretical framework for explaining these tremendous diversification dynamics. This paper therefore aims to re‐evaluate the wider validity of the path‐dependent conceptualization of regional diversification in the context of a lower‐middle income economy. To this end, we analyse the diversification of Vietnamese regions between 2006 and 2015. In order to take into account context‐specific conditions that characterize Vietnam's economy, we add the role of foreign‐owned firms and state‐owned enterprises to the conceptualization of regional diversification processes. While the role of relatedness holds true for Vietnam, the presence of foreign‐owned firms allowed Vietnamese regions to break away from path dependency and diversify to unrelated industries. The findings highlight that only by adapting the analysis to context‐specific conditions are we able to understand how regional diversification takes place across different settings.

Hyper‐peripheral regional evolution: The “long histories” of the Pilbara and Buryatia

AbstractIn this article, we outline how evolutionary economic geography (EEG) explains peripheral economic development by comparing two peripheries over extended time periods. This comparison involves critically appraising EEG’s capacity to account for peripheral evolution. For geographical, historical, and political reasons, peripheries lack resources that lead to path creation and renewal. The hyper‐peripheral regions of the Pilbara in north‐west Australia and of Buryatia in south‐east Russia provide excellent comparative case studies for understanding how peripheral regional development evolves in ways contingent upon time, state institutions, natural resource endowments, and region/firm dynamics. Our analysis shows that EEG is well equipped to deal with historical factors and capitalist economies but it struggles to reconcile these regions’ resilience and ability to sustain both Indigenous and non‐Indigenous socio‐economies. Development in these regions over extended periods of time invites questions about whether it is appropriate to apply EEG and its constituent parts: path creation, renewal, and exhaustion; regional resilience; and institutional thinness and thickness. In addressing those questions, we show that EEG can incorporate temporal development, stretching over long periods and economic analysis. We also critique the extent to which EEG can be used to consider how state activities influence path creation and renewal, the importance of extra‐regional contexts, and heterodox and Indigenous perspectives.

The Financial Geography of Resilience: A Case Study of Goldman Sachs

For all of its iconic character and controversial influence, Goldman Sachs has received rather shallow scrutiny in social sciences. This article combines an in-depth case study of Goldman Sachs with a theoretical contribution at the nexus of financial geography and evolutionary economic geography. We contend that spatial arbitrage and regulatory capture are fundamental to the organizational resilience of financial firms. Using empirical evidence, we further argue that financial centers’ adaptive resilience is a product of their strategic positioning in financial firms’ value chains. We formalize this contribution with a framework describing a set of paper, cyber, relational, and technical dimensions of financial centers’ resilience and emphasizing regulatory capture in firms’ response and adaptation to shocks. We deploy our framework in a case study of the evolution of Goldman Sachs between 1999 and 2017, focusing on how it contributed and adapted to the financial crisis of 2008–2009. Using original quantitative data and interviews, we shed light on how, as a product of the crisis, the firm unbundled its New York metro operations toward Salt Lake City and how the latter evolved from a brass-plate center to the bank’s second largest U.S. office.

Development Path of Industrial Heritage Tourism: A Case Study of Kitakyushu (Japan)

Industrial heritage tourism is aimed at promoting sustainable development in the regional social economy. Japan published Heritage Constellations of Industrial Modernization in 2007 and 2008, and treated them as an important resource to promote the activation of the local economy. Evolutionary economic geography offers a useful framework for studying the evolution of industries and has already been applied to study the different types of tourism destinations, what is often unclear, however, is under what conditions declining industrial cities can be transformed into an industrial heritage tourism destination and by whom. Thus, this article tries to employ the EEG approach to understand the development of industrial heritage tourism in Japan, using Kitakyushu City as a case. The case of Kitakyushu City illustrates the importance of initial conditions and stakeholder collaboration in promote the development of industrial heritage tourism. The results of this study also showed that participation of community residents and the application of new technologies, strong support from national and local governments are critical to the new path creation.