Technological Growth and Economic Geography

IGIER Working Paper n. 139

36 Pages Posted: 22 Jan 1999

See all articles by Giovanni Peri

Giovanni Peri

University of California, Davis - Department of Economics

Date Written: November 1998


The literature pioneered by Krugman (1991a) now known as "New economic geography" has developed very insightful models to understand phenomena as the agglomeration of economic activity and the specialization of regions. Nevertheless I think that the emphasis on the process of specialization, has been somewhat misleading both at a theoretical and empirical level. The attention of the literature has been focused on decreasing transport costs as the unique engine of the process. I develop a modified version of such models in which technological knowledge and its growth and spillovers are important forces at work, once agglomeration has taken place. I obtain the interesting result that after the dramatic tendency to specialization, driven by decreasing transport costs, local technological growth generates a tendency towards de-specialization, in the most advanced regions. This pattern fits the stylized facts relative to the last 40 years in the U.S. There, after a strong tendency towards industrial concentration, there has been a tendency, towards de-concentration. A first look at the data for European countries, for the last 30 years also shows a tendency to constant or slightly decreasing concentration of industries and de-concentration of innovative activity.

JEL Classification: F19, O33

Suggested Citation

Peri, Giovanni, Technological Growth and Economic Geography (November 1998). IGIER Working Paper n. 139, Available at SSRN: or

Giovanni Peri (Contact Author)

University of California, Davis - Department of Economics ( email )

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Davis, CA 95616-8578
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530-752-9382 (Fax)

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