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Philip McCann and Frank van Oort

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Philip McCann and Frank van Oort

Theoretically, economic geography, new economic geography (NEG) and urban economics share much common ground. Several criticisms of the monopolistic modelling logic of NEG have come from economic geography schools of thought as well as from orthodox and heterodox schools of economics. These critiques focus variously on the immeasurability of notions of increasing returns, the static nature of assumptions, the specific focus on the representative firm, the presence only of pecuniary economies and the absence of either human capital or technological spillovers as externalities. However, advocates of the new economic approaches argue that their analyses provide insights into spatial economic phenomena which were previously unattainable under the existing analytical frameworks. In this chapter we reflect on these developments, putting equal weight on both conceptualisations, set off against a historical review of agglomeration and regional economic growth theories.

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Otto Raspe and Frank Van Oort

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Frank van Oort and Mark Thissen

Analysing regional competitiveness by benchmarking regions on various indicators is a common practice. However, such rankings of regions are not based on actual competition; instead, they compare a set of regions on various indicators. This chapter benchmarks regions using a measure for revealed competition based on product-specific spatial market overlap on firms’ export markets, on knowledge cooperation among scientists, and on the attraction of foreign direct investment (FDI). This analysis shows that this revealed competition is not only spatially different for these three types of competition, but that it is also region- and market-specific. This confronts policymakers with complicated place-based decisions concerning investments aimed at enhancing a region’s competitive position in Europe, which is far more complicated than suggested by existing benchmarking exercises. The chapter illustrates this with the example of the city of Utrecht, which is currently the most competitive region according to the European Regional Competitiveness Index.

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Frank G. van Oort and Otto Raspe

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Frank G. van Oort and Otto Raspe

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Jeroen van Haaren, Frank van Oort and Jan-Daan Maasland

In this chapter we show that firms on knowledge locations have significantly different growth dynamics compared to firms outside such locations. The hypothetical benefits of being located on knowledge locations presume accelerated growth, through among others labour market pooling, specialist shared services and localised learning through spillovers. Our results point to non-stationarity and larger turbulence in growth dynamics - the amplitude of employment change in firms on knowledge locations is larger in times of both growth and decline. During economically vital and stable periods, firms on knowledge locations grow faster than firms located elsewhere, but during the economic downturn period, these firms decline faster than firms in other locations. It is also shown that these dynamics are heterogeneous between locations as well as firm size. Firms in locations with or closer to larger concentrations of business services and modern industry grow more. The presence of larger firms is conditional to growth. We zoom in on the cities of Rotterdam and The Hague and show micro-evidence of these growth dynamics and its agglomeration causes in knowledge locations defined by local municipal policy. Place-based policies are popular around the world, but our empirical analysis on its effectiveness in the Netherlands shows that less policy-prone industrial organization circumstances matter as much.