Edited by Aura Reggiani and Peter Nijkamp
Chapter 11: The Spatial Formation of the Automobile Industry in Great Britain: Does Location Matter?
Rik Wenting and Ron A. Boschma 11.1 INTRODUCTION There is increasing awareness that evolutionary economics may bring new insights into the field of economic geography (Boschma and Lambooy 1999). This certainly applies to the analysis of the spatial evolution of a new industry. A key issue in this growing literature is to explain through which mechanisms new competences emerge and diffuse in space when a new industry grows (Boschma and Frenken 2003). Recently, two mechanisms have attracted special attention, that is, spin-off dynamics and agglomeration economies. Spin-offs are new firms that are founded by former employees of incumbent firms in the same industry (Klepper 2001). Recent studies have shown that spin-off dynamics are one of the driving forces behind the growth of many industries (Mossig 2000; Helfat and Lieberman 2002). Taking an evolutionary perspective, we describe the spin-off process as a transfer mechanism of tacit knowledge in which the spin-off inherits the routines of the parent organization. In addition, we view agglomeration economies as another vehicle for knowledge creation and knowledge diffusion. In particular, we stress the importance of localization economies based on the related variety on which a new industry can build, offering, for instance, a local stock of potential entrepreneurs and skilled labour. Thus, spin-offs and agglomeration economies provide different but complementary evolutionary explanations for the spatial formation of an industry. The aim of this chapter is to apply this evolutionary framework to an analysis of the spatial evolution of the British automobile industry from the very first...
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