2019 Volume 65 Issue 3 Pages 239-259
The purpose of this paper is to review the evolutionary approach to regional clusters and networks by evolutionary economic geography in relation to institutional economic geography, and to discuss the strengths and problems of both approaches. In particular, the author focused on empirical research done by ‘the Utrecht School', of evolutionary economic geography including Ron Boschma and Koen Frenken. The arguments are summarized in three points as follows.
Firstly, the author examined the argument of viewing regional clustering as an evolutionary process. Evolutionary approach explains the formation of regional clusters not by rational locational choice of agents, but by the tendency that spin-offs locate geographically close to their parent companies and that spin-offs that inherit superior routines survive longer and generate more spin-offs than those that do not. It is also argued that types of agglomeration economies differ depending on the developmental stage of regional clusters. In the stage of cluster emergence, an urbanization economy matters. Above all, related variety is expected to facilitate the diversification of existing industries into new related industries. In the growth stage, firms in the cluster come to benefit from a localization economy. However, specialization to one specific industry may increase the risk of negative lock-in in the stage of maturity.
Secondly, qualitative research by institutional economic geography have the advantage of being able to shed light on some elements that the quantitative analyses by the Utrecht school has overlooked, for example, the existence of regional institutions that enhance spin-offs. On the other hand, these institutional approaches need to focus more on institutional changes over time, namely, the evolution of institutions. While existing local institutions condition the behaviors of individual actors, they can change their own institutions. We need to recognize that the relationship the between the actions of actors and their territorial institutions are reflexive. As a discipline, economic geography is theoretically and methodologically pluralistic and has the potential to provide new insights through dialogues of the evolutionary/institutional approach and the quantitative/qualitative method.
Finally, the author examined the argument that explains the formation and development of inter-firm networks as an evolutionary process. In this respect, evolutionary economic geography intersects with relational economic geography. As knowledge networks in clusters are not pervasive but selective, knowledge is not ‘in the air'. That is, all firms cannot necessarily equally access valuable knowledge. Firms that are tightly connected in local knowledge networks have advantages in obtaining knowledge more than firms that are isolated or located on the periphery of the networks. Moreover, the formation of ties in inter-firm networks are caused by both geographical proximity and several social factors (for example, homophily, triadic closure, preferential attachment). There is a need to understand how spatial networks evolve over time from the point of view of their interrelationship of the spatial and the social.
