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The Handbook of Evolutionary Economic Geography

The Handbook of Evolutionary Economic Geography

Elgar original reference

Edited by Ron Boschma and Ron Martin

This wide-ranging Handbook is the first major compilation of the theoretical and empirical research that is forging the new and exciting paradigm of evolutionary economic geography.

Chapter 24: An Evolutionary Model of Firms’ Location with Technological Externalities

Giulio Bottazzi and Pietro Dindo

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


* Giulio Bottazzi and Pietro Dindo 1. Introduction The present contribution intends to pursue the analysis of the effects of the evolutionary metaphor (Dosi, 1988; Freeman, 1986; Nelson and Winter, 1982) when applied inside the domain of economic geography. In principle, the validity of the assumption of evolutionary economics is all but obvious and the question of whether economic interactions can be effectively thought of as an evolutionary process still open. With the clear risk of oversimplifying the matter, we could say that the notion of evolution immediately entails three consequences for the economic dynamics. First, it should move from simpler to more complex structures. Second, it should progressively eliminate less efficient structures and promote the development of more efficient ones, irrespectively of the fact that this process of elimination and promotion might take place through a mechanism of adaptation by some of the economic actors or through an ‘adoptation’ by some of the markets and institutions (Alchian, 1950). Third, the progressive change or renewal of the different actors and rules should proceed in a jointly integrated way. Obviously, the central question is not whether the characteristics described above can be considered to be present in economic systems, because they certainly are. The question is whether the evolutionary accounting of their effects and causes allows for a deeper understanding and a more reliable modeling of economic interactions. In the end, one is interested to know if this accounting could help in the development of more effective policies. In principle, however, the...

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