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Regional Specialization and Technological Leapfrogging

23 Pages Posted: 10 Dec 1998  

Mary Amiti

International Monetary Fund (IMF) - Trade Unit; The University of Melbourne - Department of Economics; Centre for Economic Policy Research (CEPR)


This paper investigates circumstances where a region loses its technological leadership after some major technological breakthrough. Input-output linkages between firms in a Cournot upstream industry and a perfectly competitive downstream industry create forces for agglomeration in particular locations, driving up prices of immobile factors. A new superior technology, incompatible with the old, will not benefit from these linkages, so is more likely to be established in locations with little existing industry due to lower factor prices. Furthermore, it is possible that the old and new technologies can coexist.

JEL Classification: F12, F17, O33

Suggested Citation

Amiti, Mary, Regional Specialization and Technological Leapfrogging. Available at SSRN: or

Mary Amiti (Contact Author)

International Monetary Fund (IMF) - Trade Unit ( email )

700 19th Street NW
Washington, DC 20431
United States
202-986-3572 (Phone)
202-589-7767 (Fax)

The University of Melbourne - Department of Economics ( email )

Melbourne, 3010
+61 3 8344 7652 (Phone)
+61 3 8344 6899 (Fax)

Centre for Economic Policy Research (CEPR)

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

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