Regional Industrial Diversification Research Articles

Ports as catalysts: spillover effects of neighbouring ports on regional industrial diversification and economic resilience

ABSTRACT Recognising the intricate link between ports and regional economies, this study investigates the spillover effects of neighbouring ports on regional industrial diversification and economic resilience. Analysing South Korea’s 2006–20 export data from port and neighbouring port regions, it uncovers the unique feature of ports as a distinctive knowledge source within their port regions, mainly attributable to the respective logistic and trade systems governing similar product groups. The paper confirms that ports facilitate industrial diversification through spillover effects when it is related with the regional industries. Emphasising ports’ role in strengthening economic resilience, it highlights their significance in nurturing emerging industries post-crisis.

Regional industrial diversification of China: Based on technological relatedness and complexity

Regional industrial diversification of China: Based on technological relatedness and complexity

Who leads regional industrial dynamics? “New industry creators” in Chinese regions

AbstractRecent evolutionary economic geography studies have argued that regional diversification emerges as a path‐dependent process, as regions often branch into industries that are related to its industrial structure. However, it is less clear who are creating new industries and under what regional conditions. This research seeks to fill this gap and identify “new industry creators” in regional industrial diversification. We differentiate two types of new industry formation—path‐breaking and path‐dependent—and examine whether some new industry creators are more path‐breaking than others, by incorporating two factors that have been largely overlooked in recent literature on technological relatedness—firm heterogeneity and regional institutions. Based on a firm‐level data set of China’s manufacturing industries, this paper shows that path‐breaking and path‐dependence coexist. Empirical results confirm that firm heterogeneity and regional institutions not only affect the firms’ capabilities in creating new industries, but also encourage/discourage firms to be adventurous and path‐breaking. This research implies that lagging regions can catch up with developed regions by coordinating regional resources and adjusting local institutional arrangements to attract more path‐breaking firms.

Proximity Matters: Inter‐Regional Knowledge Spillovers and Regional Industrial Diversification in China

AbstractThe effects of knowledge spillovers from neighbouring regions on regional industrial diversification should not be overlooked. Here we are referring to not only intra‐industry knowledge spillovers from neighbouring regions, but also the spread of knowledge from related industries in neighbouring regions. This paper also develops an analytical framework that pays more attention to the role of institutional proximity between regions and how it is associated with geographical and cognitive proximity, and acknowledges that institutional proximity may generate asymmetric effects in the process of inter‐regional knowledge spillovers. Using the Chinese custom database during 2002–11, we confirm that knowledge spillovers from neighbouring regions play a key role in regional industrial diversification. More importantly, inter‐regional knowledge spillovers are likely to occur more efficiently if two regions have similar institutional contexts. It is also shown that institutional proximity could generate asymmetric effects in inter‐regional knowledge spillovers.

Evolution of Export Product Space in China: Technological Relatedness, National/Local Governance and Regional Industrial Diversification

AbstractRegions tend to develop new products that are related to pre‐existing industrial structure. This stresses the critical role of relatedness in regional industrial diversification. Governments can also strongly affect the evolution of regional industrial structure by using a variety of industrial policies. Based on China's custom product level data, this study explores the evolution of China's export product space during 2000–2011. Econometric analyses suggest that the evolution of export product space in China is heavily driven by relatedness between export products, indicating that regional industrial diversification is path‐dependent. Chinese national and local governments can exert significant influence on the evolution of export products by using export and FDI‐related policies and by establishing development zones. More importantly, national and local governments have played conflicting roles in China's regional industrial dynamics.

Good neighbors, bad neighbors: local knowledge spillovers, regional institutions and firm performance in China

Recent evolutionary economic geography studies have stressed technological relatedness as a key explanatory factor for regional industrial diversification. It is further argued that firms that manufacture products with dense connections to regional industrial structure benefit the most from local knowledge spillovers and thus should grow faster. Based on a firm-level dataset on China’s manufacturing industry over the 1998–2008 period, our results indicate that the density of links between a firm’s products and local industrial structure does yield firm performance enhancing spillovers. We further decompose the overall density indicator and point out the lack of connections between firms of different ownership types in terms of information exchange and technological diffusion. Finally, empirical results confirm that regional institutions play a critical role in the spillover diffusion between firms of different ownership structures.

Regional industrial diversification: evidence from German gross value added

The idea of this paper is to apply modern portfolio theory to the gross value added shares of different economic activities in order to determine whether or not industry portfolios are efficient. Using the national accounts (Volkswirtschaftliche Gesamtrechnung) of Germany’s federal states for 2011, I run numerical simulations of their gross value added shares to determine the set of “efficient mean-variance combinations” (Markowitz, J Financ 7:77–91, 1952) of economic activities for each German federal state. The paper finds that their 2011 industry portfolios are in fact not efficient, and that rearranging the shares of economic activities increase total gross value added and decrease its risk. According to the numerical results, German federal states—at least Western Germany—could move from industrial to knowledge-based trading and service economies. The results are robust for different sample periods of Germany’s national accounts and the underlying assumptions of the numerical simulations are confirmed by using a sample of EU countries.

A Correlation Analysis among Regional Industrial Diversification, Job Creation and Regional Competitiveness

A Correlation Analysis among Regional Industrial Diversification, Job Creation and Regional Competitiveness

A Comparison of Measures of Industrial Specialization For Travel-to-work Areas in Great Britain, 1981-1997

That industrial specialization is inversely correlated with regional size is an established empirical finding. However in establishing this relationship, authors have used several different measures of regional industrial specialization or diversification. This review paper investigates whether the choice of measure is important in such work. Eleven different measures found in the literature are compared with respect to their distributions, their degree of correspondence and their behaviour over time. It is found that there appear, within this set, to be three groups of measures. Within each group results are relatively consistent, whereas between each group the differences are quite marked. This suggests that results might be influenced by the choice of specialization measure used.

An Equilibrium Analysis of the Diversification of Regional Agriculture

Regional industrial diversification policies seek to achieve a more stable economy through a ‘better’ balance among the industries currently active in the region and through the development of new industries. In this paper, we provide a consistent model of regional industrial diversification that explicitly incorporates the regional industrial structure and sources of economic instability, and facilitates the inclusion of data on technologies not currently observable in the region. We illustrate it with an application to a current policy concern: the diversification of agriculture and food processing in Saskatchewan.

Consistency of Regional Industrial Diversification and Air Quality Policies

Regional industrial diversification policies promote industries that will increase economic welfare by improving the balance between the standard of living and the stability of that standard of living. Regional air quality policies seek to reduce undesirable air emissions. This paper analyzes the interaction of regional air quality and industrial diversification policies, using a simple but tractable stochastic equilibrium model of regional income formation. We apply the model to data that describe the relationship between industrial structure and air emissions in Saskatchewan, and find that, in general, taxes designed to reduce harmful air emissions increase the variability of income. The major exception is a tax on refined fuels, which both reduces emissions and income variability.

Regional Economic Instability and Industrial Diversification in the U.S.: Comment

Regional Economic Instability and Industrial Diversification in the U.S.: Comment

An evaluation of alternative measures of regional industrial diversification

Jackson R. W. (1984) An evaluation of alternative measures of regional industrial diversification, Reg. Studies 18, 103–112. Industrial diversity continues to be a goal in regional planning and policy contexts. While the concept has strong intuitive appeal, its definition and measurement suffer from problematic theoretical and statistical issues. An empirical analysis of the relationship between employment stability and four measures of diversity for multicounty regions in the State of Illinois is presented. The results indicate that the nature of the stability/diversity relationship is swamped by the measurement and estimation techniques employed. Current diversity measures are deemed inadequate for regional policy makers. The ensuing discussion highlights a number of conceptual and statistical issues which must be addressed by practitioners.

A measure of regional diversification and efficiency

This paper develops a model to measure regional industrial diversification in a Markowitz portfolio context, using the notion of a regional efficiency frontier. It argues that a region can be considered to be optimally diversified when it is on this efficiency frontier. The extent to which a region's portfolio deviates from the efficiency frontier suggests a useful measure of diversification with normative aspects that are conspicuously absent from the more commonly used indices. In this context, regional diversification is then compared to various other measures using Canadian provincial employment data.

The Scottish Office and The Special Areas in the 1930s

In 1934 two commissioners (for England and Wales and for Scotland) were appoineted to tackle the problems caused by high and Persistent unemploed in areas dependent on a narrow and depressed range of industriues. These Statutory Special Areas were only some of the most depressed parts of the country, in scotland largely west-central Scotaland but excluding Glasgow. defects in the policies adopted, and in their implementation by the commissioners, are well known, especially their alleged failure to encourage adequatelythe newindustrial development the special Areas needed. Certainly the powers and the financial provision given tio the commissioners in 1934 were slight, but they were increased in new legislation in 1937 and had little time to become effective before the outbreak of war. In addition, lack of success, especially in the end towards which the policies were directed as much as because of their own inadequacy or insufficiency. the end, justifiable in the conditions of the 1930s, was to releive unemployement, not to encourage a distinctive policy of regional industrial diversification. The Report of the Royal Commission on the Distribution of the Industrial Population Suggested a new direction in 1940, but its views were applied as part of an overall strategy only in the 1960s. A comment of 1952 may be applied from the pre-war years throughout the 1950s. Only the name of the special Areas had been changed.

A SPECTRAL MEASUREMENT OF THE CYCLICAL PATTERNS OF MULTIVARIATE TIME SERIES

ABSTRACTAlthough the diffusion and transmission of cyclical impulses are basic characteristics of economic and business activities, traditional studies of business cycles do not provide an effective measure of cyclical interaction. The purpose of this paper is to use spectral analysis to determine the cyclical patterns of multivariate economic and business time series. The proposed methodology was applied to the regional industrial diversification problem.

The Concept and Measurement of Regional Industrial Diversification

The relationship between the economic structure of subnational regions and their relative responsiveness to fluctuations in national economic activity has been a persistent vein of inquiry within regional economics for nearly thirty years. The pursuit of diversified local economic structures in response to potentially unstable dependence upon single industries or groups of industries is a thoroughly ensconced dimension of virtually every contemporary local development effort. The professional research upon which such planning orientation is presumably based, however, has been less than satisfying in both its theoretical and empirical dimensions. In fact, a distinct pessimism permeates the literature with respect to the relationship between diversification of industrial structure and stability of local economic activity [see Isard, 10, 276; Richardson, 15, 148]. In this paper we shall note that such pessimism may be premature. Previous attempts to define and measure industrial diversity in economically meaningful ways have suffered from significant conceptual shortcomings; and empirical attempts to relate such definitions to historical stability have, almost without exception, been such as to understate the potential of diversification efforts to reduce instability in regional economic activity. The conceptual difficulties of the four principal measures of regional industrial diversity or diversification are here demonstrated, and the limitations of empirical studies to date are noted. A new conceptual approach is offered and is shown to lead naturally to a new measure of industrial diversification which appears to alleviate several of the problems encountered in previous measures. The results of empirical analyses of the relative ability of the new measure to explain statistically the historical instability of a cross-section of 52 U.S. metropolitan regions are also reported. The results provide some evidence not only that the new measure seems to explain variation in instability considerably better than its precursors but also that it appears to do so sufficiently well in absolute terms to raise new in erest in the policy goal of intra-regional diversification.