New Directions in Economic Geography

New Directions in Economic Geography

New Horizons in Regional Science series

Edited by Bernard Fingleton

This important book explores original and alternative directions for economic geography following the revolution precipitated by the advent of so-called ‘new economic geography’ (NEG). Whilst, to some extent, the volume could be regarded as part of the inevitable creative destruction of NEG theory, it does promote the continuing role of theoretical and empirical contributions within spatial economic analysis, in which the rationale of scientific analysis and economic logic maintain a central place. With contributions from leading experts in the field, the book presents a comprehensive analysis of the extent to which NEG theory is supported in the real world. By exploring whether NEG theory can be effectively applied to provide practical insights, the authors highlight novel approaches, emerging trends, and promising new lines of enquiry in the wake of advances made by NEG.

Chapter 7: Specialization and Regional Size

John Dewhurst and Philip McCann

Subjects: economics and finance, regional economics, urban economics, geography, economic geography, urban and regional studies, regional economics, urban economics


John Dewhurst and Philip McCann INTRODUCTION In this chapter we investigate the relationship between the size of an area and the extent of its industrial specialization. Much recent literature in regional economics and new economic geography suggests that certain patterns of industrial specialization, and by implication, regional trade, will be empirically evident within the spatial economy. In particular, renewed theoretical interest on the role played by agglomeration economies in determining the patterns of regional specialization, has also led to the development of new empirical efforts aimed at identifying such agglomeration effects. However, a fundamental point that has been largely overlooked in the literature on agglomeration is the fact that the outcomes of these empirical exercises may themselves also be affected by our chosen spatial units of analysis. As such, it is necessary to be rather cautious where empirical evidence is used to support theoretical arguments of agglomeration externalities. In order to discuss the relationship between the size of a region and its level of specialization we analyse UK sectoral employment data at a variety of different levels of spatial aggregation. This allows us to distinguish the effect of regional size on measures of industrial specialization from those related to agglomeration economies. In the following sections we outline how this issue is generally understood by researchers. In Section 7.2 we explain the general understanding in the literature regarding the relationship between employment specialization, density and agglomeration effects. In Section 7.3 we focus on the problematic...

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