Scandinavian Working Papers in Economics

Working Paper Series in Economics and Institutions of Innovation,
Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies

No 2: Parsing the Menagerie of Agglomeration and Network Externalities

Börje Johansson ()
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Börje Johansson: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology, Postal: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology, SE-100 44 Stockholm, Sweden

Abstract: Externalities have for a long time been perceived as awkward cases that are alien to well-structured economic analyses. During recent decades ideas inherited from Marshall and others have regained interest in the analysis of specialisation and trade, urban formation and growth as well as innovation processes. A variety of contributions has brought about an equally varied set of externalities with labels such as localisation and urbanisation economies, industrial districts, innovative regions. This presentation attempts to bring order to the many ideas about externalities by classifying them with regard to the sources and consequences of the externalities, and to the externality mechanisms. A basic separation is made between those externalities that affect efficiency and those that generate developmen

Keywords: Externalities; Networks; Agglomeration; Innovation

JEL-codes: L11; O30; R30

42 pages, September 28, 2004

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