• Journal of the Korean Regional Science Association
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• v.13 no.2
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• pp.45-54
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• 1997

A regional economy is characterized as a spatial economy. However the literature shows that it has been treated as a point economy since space is little recognized in regional modeling due to mathematical complication. This leads to the fact that regional model does not sufficiently represent regional characteristic. This paper attempts to construct a regional growth model in a partial equilibrium framework specifically taking into consideration land as a primary factor. The model is formulated largely neoclassical. Labor is assumed to move in response to differences in the wage rate, while capital is perfectly mobile across regions. The paper shows that two growth equilibrium points exist, one stable equilibrium point and the other unstable equilibrium point. The unstable growth equilibrium indicates the existence of minimum threshold that a region must overcome the minimum threshold to grow constantly. Consequently, directions of regional growth are characterized by two growth paths depending on the initial condition of a region. That is to say, a region below the minimum threshold is converging toward the lower stable equilibrium point over time. When a regional economy initially lies above the minimum threshold, it will grow forever. A regional economy is not thus necessarily converging a stationary is not thus necessarily converging a stationary equilibrium point through factor movement. Finally, the impacts of the presence of agglomeration economies and diseconomies are analyzed through the phase diagram. The paper also shows that agglomeration economies result in lowering the minimum threshold and in escalating the level of stable equilibrium However, when agglomeration diseconomies prevail, the results are opposite, i.e., rising the minimum threshold of growth and lowering the growth level of stable equilibrium.

• Journal of Technology Innovation
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• v.19 no.2
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• pp.153-184
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• 2011

This paper investigates what kind of technological partner firms want to cooperate with in terms of partner location. Two geographical factors are considered. One is geographical proximity, given the tradeoff between the effectiveness of knowledge spillovers in proximity and diverse knowledge absorption from geographically distant partners. The other is how many other firms are co-located with potential partners because it is known that clustering regions can create more technological outputs. Analysis on 2008 Korea Innovation Survey data finds that partner proximity is the single most important factor in choosing a cooperation partner. While firms that are located in a region crowded with related industries prefer proximate partners, others that are surrounded by unrelated industries are more likely to cooperate with distant partners. The findings suggest that geographical proximity matters in partner selection because it not only stimulates knowledge spillovers but also reduces costs involving R&D cooperation such as monitoring costs and information costs. Moreover, firms take into consideration both the benefits and risks of clustering regions. If there are so many unrelated firms that they create agglomeration diseconomies such as congestion costs and unintentional knowledge leakages, firms are more likely to try to find their cooperation partners in other regions.