It's All in Marshall: The Impact of External Economies on Regional Dynamics

45 Pages Posted: 25 Sep 2007

See all articles by David B. Audretsch

David B. Audretsch

Indiana University Bloomington - School of Public & Environmental Affairs (SPEA)

Oliver Falck

CESifo (Center for Economic Studies and Ifo Institute) - Department Human Capital and Innovation

Stephan Heblich

University of Stirling - Department of Economics

Date Written: September 2007

Abstract

Marshall's student Pigou noted: "It's all in Marshall." From a static point of view, this seems rather bold in a constantly changing world. However, this statement becomes more plausible in a dynamic context, where principles are subject to change. Indeed, over time, Marshall's concept of external economies gained fresh perspective as new concepts of regional characteristics and agglomeration evolved. This paper focuses on the impact of region and industry on dynamics and growth, distinguishing between industrial districts, industrial agglomerations and urban agglomerations. Based on these three types, we use a comprehensive large dataset on German regions to test the following: (1) these regions can be characterized by given location variables describing geographic location, firm structure, and surrounding location factors and (2) every region's locational variables affects its potential for dynamics.

Keywords: regional and urban development, agglomeration, industrial districts, location factors, external economies

JEL Classification: O18, R11, R12

Suggested Citation

Audretsch, David B. and Falck, Oliver and Heblich, Stephan, It's All in Marshall: The Impact of External Economies on Regional Dynamics (September 2007). CESifo Working Paper Series No. 2094, Available at SSRN: https://ssrn.com/abstract=1016956 or http://dx.doi.org/10.2139/ssrn.1016956

David B. Audretsch

Indiana University Bloomington - School of Public & Environmental Affairs (SPEA) ( email )

1315 East Tenth Street
Bloomington, IN 47405
United States

Oliver Falck (Contact Author)

CESifo (Center for Economic Studies and Ifo Institute) - Department Human Capital and Innovation ( email )

Poschingerstr. 5
Munich, 81679
Germany

Stephan Heblich

University of Stirling - Department of Economics ( email )

Stirling, Scotland FK9 4LA
United Kingdom

HOME PAGE: http://www.management.stir.ac.uk/people/economics/academic-staff/dr-stephan-heblich

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