Scandinavian Working Papers in Economics

Papers in Innovation Studies,
Lund University, CIRCLE - Centre for Innovation Research

No 2015/35: Neighbor regions as the source of new industries

Ron Boschma (), Víctor Martín () and Asier Minondo ()
Additional contact information
Ron Boschma: CIRCLE, Lund University; Utrecht University
Víctor Martín: Universidad Rey Juan Carlos and ICEI
Asier Minondo: Deusto Business School and ICEI

Abstract: The development of new industries demands access to local capabilities. Little attention has yet been paid to the role of spillovers from neighbor regions for industrial diversification, nor has the role of network linkages between neighbor regions been investigated. As the spread of capabilities has a strong geographical bias, we expect regions to develop new industries in which their neighbor regions are specialized. To test this hypothesis, we analyze the development of new industries in US states during the period 2000-2012. We show that an US state has a higher probability of developing a comparative advantage in a new industry if a neighbor state is specialized in that industry. We also show that neighbor US states have more similar export structures. This export similarity seems to be explained by higher social connectivity between neighbor states, as embodied in their bilateral migration patterns.

Keywords: new industries; regional branching; diversification; knowledge spillovers; US; regions; exports

JEL-codes: N94; O14; R11

38 pages, October 2, 2015

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201535_Boschma_et_al.pdf PDF-file 

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