On the Marshall – Jacobs controversy: It takes two to tango

On the Marshall – Jacobs controversy: It takes two to tango

Van der Panne, G.
Van Beers, C.

Technology, Policy and Management

2006-04-01

The literature is inconclusive as to whether Marshallian specialization or Jacobian diversification externalities favour regional innovativeness. The specialization argument poses that regional specialization towards a particular industry improves innovativeness in that industry. Regional specialization allows for knowledge to spill over among similar firms. By contrast, the diversification thesis asserts that knowledge spills over between firms in different industries, causing diversified production structures to be more innovative. Building on an original database, we address this controversy for the Netherlands. We thereby advance on the literature by providing a two-level approach, at the region’s and the firm’s level. At the regional level, we compare specialized with diversified regions on numbers of accommodated innovators. At the firm level, we establish causalities between externalities and degree of innovativeness. The results unambiguously suggest Marshallian externalities: specialized regions accommodate increased numbers of innovating firms and, consistently, incumbent firms’ innovativeness increase with regional specialization. Once the product has been launched, innovators in diversified Jacobian regions appear to be more successful in commercial terms than innovators in specialized Marshallian regions.

industrial clusters
innovation
knowledge externalities

http://resolver.tudelft.nl/uuid:4f7f66b8-f03b-4f36-ba70-8111eed3c15b

Delft University of Technology

IS- 2006-04 Delft Innovation System Papers

Institutional Repository

report

(c) C. van Beers en G. van der Panne