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New Directions in Economic Geography

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.
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Chapter 11: Agglomeration and Internet Exchange Points: An Exploration of the Internet Morphology

Alessio D’Ignazio and Emanuele Giovannetti


Alessio D’Ignazio and Emanuele Giovannetti 11.1 11.1.1 INTRODUCTION Internet Connectivity Does geographical location play a role in sustaining cooperation among Internet companies? While there is a growing literature on how information and communication technology (ICT) affects inter-firm relations, less attention has been paid to their effects on Internet service providers (ISPs), the firms that provide the interface between final users and the Internet. In this chapter we investigate the possibility that geographical agglomeration of ISPs affects their propensity to peer1 at Internet exchange points2 (IXPs). In particular, we focus on the over 30 IXP members of the European Internet Exchange Points Association (Euro-IX), studying more in depth, three major IXPs among them: the London Internet Exchange (LINX), the Deutsche Commercial Internet Exchange (DE-CIX) and the Amsterdam Internet Exchange (AMS-IX). We explore how ICT exerts two opposite effects on agglomeration: a weakening of the centrifugal forces, due to the lessening of the isolation market power, and a redesigning of the barycentre of the centripetal forces, focusing agglomeration around virtual locations. Our empirical analysis of the bilateral peering decisions involving the ISPs connected with the LINX in London, the DE-CIX in Frankfurt and the AMS-IX in Amsterdam confirms that peering is significantly influenced by several elements: a major role seems to be played by the reputation effects and knowledge between each other, the possibility of routing traffic to the destination network relatively soon, as well as the level of traffic imbalances...

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