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The Lifecycle of Regions

Author

Listed:
  • Audretsch, David
  • Feldman, Maryann P
  • Falck, Oliver
  • Heblich, Stephan
Abstract
Major economic transitions, even when they are disruptive, do not occur instantaneously but rather occur over time, as regions within a country change at different rates. Accordingly, these dynamics may be reflected in a geographic lifecycle with different regions characterized by different phases analogous to the industry lifecycle model. In accordance with this argument, this paper tests the hypothesis that regions can be characterized as evolving over a predictable and well-defined lifecycle: (1) an initial entrepreneurial phases where Jacobs externalities and inter-industry start-ups prevail; (2) a routinized phase where innovation takes place within top-performing incumbents; (3) a second entrepreneurial phase characterized by Marshall-Arrow-Romer externalities, leading to intra-industry start-ups in niches; and (4) a second phase of routinization, in which no further innovation takes place, but is instead a phase of structural change. Using data on 74 West German planning regions, we find compelling evidence of a spatial lifecycle.

Suggested Citation

  • Audretsch, David & Feldman, Maryann P & Falck, Oliver & Heblich, Stephan, 2008. "The Lifecycle of Regions," CEPR Discussion Papers 6757, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:6757
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    References listed on IDEAS

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    2. Alexandru Pavel & Bogdan Andrei Moldovan & Karima Kourtit & Peter Nijkamp, 2020. "Urban or Rural: Does It Make A Difference for Economic Resilience? A Modelling Study on Economic and Cultural Geography in Romania," Sustainability, MDPI, vol. 12(9), pages 1-39, May.
    3. Ron Martin & Peter Sunley, 2015. "On the notion of regional economic resilience: conceptualization and explanation," Journal of Economic Geography, Oxford University Press, vol. 15(1), pages 1-42.
    4. Matthias Firgo & Peter Mayerhofer, 2015. "Wissens-Spillovers und regionale Entwicklung - welche strukturpolitische Ausrichtung optimiert des Wachstum?," Working Paper Reihe der AK Wien - Materialien zu Wirtschaft und Gesellschaft 144, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik.
    5. Fredin, Sabrina, 2012. "The Dynamics and Evolution of Local Industries – The case of Linköping," Papers in Innovation Studies 2012/7, Lund University, CIRCLE - Centre for Innovation Research.
    6. Sherrill Shaffer & Iftekhar Hasan & Mingming Zhou, 2015. "New Small Firms and Dimensions of Economic Performance," Economic Development Quarterly, , vol. 29(1), pages 65-78, February.
    7. Ron Martin & Peter Sunley, 2011. "Conceptualizing Cluster Evolution: Beyond the Life Cycle Model?," Regional Studies, Taylor & Francis Journals, vol. 45(10), pages 1299-1318, November.
    8. Christopher R. Esposito, 2020. "The Emergence of Knowledge Production in New Places," Papers in Evolutionary Economic Geography (PEEG) 2046, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Sep 2020.
    9. Bögenhold, Dieter & Fachinger, Uwe, 2009. "Entrepreneurship, Innovation and Spatial Disparities: Divisions and Changes of Self-employment and Firms," MPRA Paper 19245, University Library of Munich, Germany.
    10. Matthias Firgo & Peter Mayerhofer, 2015. "Wissensintensive Unternehmensdienste, Wissens-Spillovers und regionales Wachstum. Teilprojekt 1: Wissens-Spillovers und regionale Entwicklung – Welche strukturpolitische Ausrichtung optimiert das Wach," WIFO Studies, WIFO, number 58342.
    11. Raphaël Suire & Jérôme Vicente, 2009. "Clusters for life or life cycles of clusters. From declining to resilient clusters," Post-Print halshs-00460131, HAL.
    12. Benz Lena & Block Jörn H. & Johann Matthias S., 2024. "Hidden champions as a determinant of regional development: An analysis of german districts," ZFW – Advances in Economic Geography, De Gruyter, vol. 68(1), pages 9-39.
    13. Bögenhold, Dieter & Fachinger, Uwe, 2010. "How Diverse is Entrepreneurship? Observations on the social heterogeneity of self-employment in Germany," MPRA Paper 23271, University Library of Munich, Germany.
    14. Víctor Manuel Bellido‐Jiménez & Domingo Martín‐Martín & Isidoro Romero, 2021. "The survival of new businesses in Andalusia (Spain): Impact of urbanization, education, and gender," Regional Science Policy & Practice, Wiley Blackwell, vol. 13(1), pages 25-41, February.
    15. E. Stam & R. Martin, 2012. "When High Tech ceases to be High Growth: The Loss of Dynamism of the Cambridgeshire Regio," Working Papers 12-10, Utrecht School of Economics.

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    More about this item

    Keywords

    Knowledge externalities; Regional development; Spatial lifecycle; Innovation; entrepreneurship;
    All these keywords.

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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