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Agglomeration, clusters, and industrial policy

Nathan, Max; Overman, Henry; (2013) Agglomeration, clusters, and industrial policy. Oxford Review of Economic Policy , 29 (2) pp. 383-404. 10.1093/oxrep/grt019. Green open access

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Abstract

This paper considers the appropriate spatial scale for industrial policy. Should policy focus on particular places, targeting clusters of firms that are spatially concentrated? Or should it, instead, be ‘space neutral’, refusing to discriminate between different areas unless absolutely necessary? We provide an overview of the literature and identify two waves of literature that argue strongly in favour of a cluster approach. We argue that this approach rests on shaky theoretical and empirical foundations. In contrast, we suggest that more attention should be paid to the appropriate spatial scale for horizontal interventions. What can policy do to make cities work better, in ways that help firms to grow? That is, what is the appropriate role for ‘agglomeration’ rather than ‘cluster’ policy? Finally, we consider the possibility that some horizontal industrial policy objectives may be better served by specifically targeting particular places or from decentralized design or delivery.

Type: Article
Title: Agglomeration, clusters, and industrial policy
Open access status: An open access version is available from UCL Discovery
DOI: 10.1093/oxrep/grt019
Publisher version: https://doi.org/10.1093/oxrep/grt019
Language: English
Additional information: This version is the version of record. For information on re-use, please refer to the publisher’s terms and conditions.
Keywords: Industrial Policy; Sectoral Planning Methods - Government Policy - General
UCL classification: UCL
UCL > Provost and Vice Provost Offices > UCL BEAMS
UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of the Built Environment
UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of the Built Environment > Centre for Advanced Spatial Analysis
URI: https://discovery.ucl.ac.uk/id/eprint/10175164
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