Working Papers, Department of Economics, Lund University
Increasing Returns, Input-Output Linkages, and Technological Leapfrogging
Abstract: Firms agglomerate in one region due to increasing returns,
input-output linkages and transportation costs. In the de-industrialised
region factor prices are lower and a new technology may be profitable to
adopt in that region instead, inducing a change in the technological
leadership. This paper shows that the risk of locking in to an old
technology is monotonically increasing in the benefits of agglomeration.
Greater incompatibility between technologies also increases the risk of
rejecting potentially superior manufacturing processes.
Keywords: agglomeration; lock-in; new economic geography; technological leapfrogging; (follow links to similar papers)
JEL-Codes: F12; F43; O33; (follow links to similar papers)
28 pages, March 11, 2005, Revised July 19, 2006
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- This paper is published as:
Gallo, Fredrik, (2006), 'Increasing Returns, Input-Output Linkages, and Technological Leapfrogging', Topics in Economic Analysis & Policy, Vol. 6, No. 1
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