Is Specialization Good for Regional Economic Development?

Abstract

Is specialization good for regional economic development?, Regional Studies. Debates about urban growth and change often centre on specialization. However, arguments linking specialization to metropolitan economic development contain diverse, and sometimes conflicting, claims. Is it better to be highly specialized or diversified? Does specialization refer to the absolute or relative scale of an activity in a region? Does specialization have static or evolutionary effects? This paper investigates these questions in theoretical and empirical terms. By analysing local agglomerations over time, it is found that growing absolute specialization is positively linked to wages, while changes in relative concentration are not significantly associated with wage dynamics. Regional economic developmentSpecialization Agglomeration KEMENY T. et STORPER M. La spécialisation, est-elle bonne pour le développement économique régional?, Regional Studies. Les débats à propos de la croissance et du développement urbains portent souvent sur la spécialisation. Toujours est-il que les arguments qui relient la spécialisation au développement économique métropolitain embrassent diverses revendications souvent contradictoires. Est-ce qu'il vaut mieux être hautement spécialisé ou diversifié? La spécialisation, fait-elle allusion à l'étendue absolue ou relative d'une activité dans la région? La spécialisation, a-t-elle des impacts statiques ou évolutifs? Ce présent article examine ces questions des points de vue théorique et empirique. En analysant les agglomérations locales dans le temps, il s'avère que la spécialisation absolue croissante est liée positivement aux salaires, tandis que les changements de la concentration relative ne sont pas associés de façon significative à la dynamique des salaires. Développement économique régional Spécialisation AgglomérationJEL classifications: O18, O21, R11, R12

Variety, economic growth and knowledge intensity of European regions: a spatial panel analysis

“…Theory suggests that as firms belonging to the same sector locate near one another, they accrue important benefits. Using common suppliers and taking advantage of pooled human capital allows these firms to reduce their production and transaction costs, increase their productivity and become more competitive (Kemeny and Storper 2014). These effects are often named static externalities, as the externalities and their impact on the location choice and productivity are temporarily co-occurrent.…”

“…The main drawback of using this specialization indicator is that, being a relative measure, it cannot account for the absolute size, which is arguably important in locaization externalities (Kemeny and Storper 2014). In this regard, while there are many ways to measure specialization (Nakamura and Morrison Paul 2009; Cutrini 2010), this global measure was proved to be a robust estimator in Van Oort et al (2014) 7 and Thissen et al (2013).…”

“…This breaks down the usual diversity conceptualization in two distinctive elements that have marked different outcomes. Regional specialization and clustering remain traditionally hypothesized to be attached to productivity growth (Kemeny and Storper 2014;Frenken et al 2014).…”

The Influence of Multiple Specializations on Economic Performance in U.S. Metropolitan Areas

“…Innovation through cross-fertilization among various industries is recognized as the engine of regional economic growth [10]. In previous empirical studies, some found strong support of diversity in promoting growth [3,11], while others found evidence that supported industrial specialization [12][13][14][15][16]. Besides growth, this paper analyzed economic stability, which is known as another important aspect of regional economic performance related with industrial structure.…”

Introduction to the 50th Volume

“…They suggest that firms in the same industry can lose knowledge and talent to rivals if they are located in proximity, whereas firms in related industries are more likely to benefit from co-location and less likely to suffer. In a broader analysis of the benefits of industry specialization for wages in US metropolitan areas, KEMENY and STORPER (2015) reveal that the thing that really matters for prosperity is 'what' a city is specialized in doing, that is, whether its externally traded goods and services are relatively sophisticated or routine: 'It is good to do a lot of something, but even better to do a lot of something good' (p. 1015).…”