Geography Reference
In-Depth Information
nomic geography have used the concepts of path-dependence, lock-in and selection in
their work, such application is insui cient to render the analysis evolutionary. These
same concepts can be developed within non-evolutionary frameworks, given appropriate
assumptions. An example would be the possibility of multiple equilibria in new economic
geography models. Assuming increasing returns and transportation costs in the manu-
facturing sector, the level of transportation costs will determine whether we observe a
core-periphery structure or whether all regions diversify their economies. Because there
are a range of transportation costs where both core-periphery and diversii ed patterns
are possible, we get the possibility of multiple equilibria and a role for history or policy
to inl uence the outcome. In this sense, the actual (equilibrium) outcome may depend
on specii c historical conditions such as the geographical distribution of the population
prior to changes in the transportation costs (Fujita et al., 1999). The actually observed
outcome may thus be sensitive to historical conditions.
Based on the general principles outlined above, an evolutionary economic geogra-
phy is broadly concerned with analysis of the impact of plant location on the creation
of variety, on the transmission of information from one period to the next, and on the
extent to which the selection environment shapes spaces of competition and coopera-
tion. Economic geographers may be interested in how location inl uences the pace and
direction of the generation of novelty. Why are plants in some regions more innovative
than others? Why do plants in dif erent regions specialize in the creation of dif erent
products and technologies and organize their businesses dif erently? Why do institutions
dif er across space and how do they inl uence the creation of novelty? Work on regional
innovation systems, relational assets and regional institutions is relevant here. The exist-
ing literature contributes to a detailed understanding of those processes but focuses only
on one moment of the evolutionary process. A second moment of evolutionary analysis
must also explain the survival of entities with certain characteristics over others. This
problem entails linking the characteristics of agents such as i rms or institutions with the
broader environment in which they operate. While markets for products may be global
(entailing a global selection environment), regional institutional dif erences (national tax
policies or regional innovation policies) may raise or dampen i rm-level ei ciency and so
inl uence i rm success in global markets. A third evolutionary moment focuses on reten-
tion. Because evolution requires a certain level of stability in the characteristics of agents
and the selection environments within which they operate, we have to understand how
information is transmitted over time. Firm routines are generally identii ed as carriers of
information in i rms, and institutions are often identii ed as carriers of 'collective knowl-
edge' in regions and countries. Institutional approaches within economic geography are
critical to understand the role of institutions as carriers of information, how institutions
are created and how they evolve over time.
Note
1. Multi-level selection theory or group selection are possible ways out of this dilemma and potentially
important for the development of an evolutionary economic geography (Sober and Wilson, 1998; Vromen,
2001). Group selection refers to the idea that certain characteristics can emerge in groups of individual enti-
ties because of the benei ts they confer to groups regardless of those characteristics' ef ects on the i tness of
individual entities within the group. For instance, a group of i rms in one region may develop strong altru-
istic behavior because cooperation has resulted in knowledge spillovers and other externalities that raised
their ei ciency levels relative to i rms in another region (but not relative to other i rms within the region)
