PN218MA-EOLSS

REGIONAL DEVELOPMENT THEORY

Peter Nijkamp
VU University, Amsterdam, The Netherlands

Maria Abreu
University of Cambridge, Cambridge, UK

Keywords: accessibility, agglomeration, convergence, endogenous growth,

entrepreneurship, equity, information and communication technology, infrastructure,
innovation, location, network, new economic geography, regional development

Contents

1. Regional Development: What and Why?

2. Location of Human Activity and Regional Development
3. Entrepreneurship, Innovation and the Knowledge Economy
4. The Convergence Debate
5. Regional Development Policy in Perspective
Glossary
Bibliography
Biographical Sketches

Summary

This paper offers a concise and selective overview of regional development theories.
Starting from traditional regional growth theory, it introduces next findings from
location and agglomeration theory, including infrastructure and network modeling.
Next, innovation, entrepreneurship and knowledge are addressed, and interpreted as
critical success conditions for modern regional development. Elements from
endogenous growth theory and the new economic geography are introduced as well.
Finally, attention is paid to the regional convergence debate, while the paper concludes
with some prospective views.

1. Regional Development: What and Why?

Regional development is about the geography of welfare and its evolution. It has played
a central role in such disciplines as economic geography, regional economics, regional
science and economic growth theory. The concept is not static in nature, but refers to
complex space-time dynamics of regions (or an interdependent set of regions).
Changing regional welfare positions are often hard to measure, and in practice we often

1
use Gross Domestic Product (GDP) per capita (or growth therein) as a statistical
approximation. Sometimes alternative or complementary measures are also used, such
as per-capita consumption, poverty rates, unemployment rates, labor force participation
rates or access to public services. These indicators are more social in nature and are
often used in United Nations welfare comparisons. An example of a rather popular
index in this framework is the Human Development Index which represents the welfare
position of regions or nations on a 0-1 scale using quantifiable standardized social data
(such as employment, life expectancy or adult literacy).

The motives to measure regional development are manifold. But a prominent argument
all over the years is that welfare positions of regions or nations may exhibit great
disparities which are often rather persistent in nature. These in turn translate into large
disparities in living standards. For example, in 1960, the world’s richest country had a
per capita income that was 39 times greater than that of the world’s poorest country
(after correcting for purchasing power), while by the year 2000, this gap had increased
to 91. Areas in our world do not only have significant differences in welfare positions,
but it takes also sometimes decades or more to eliminate them. As an illustration we
take here Tanzania (the world’s poorest country in 2000), which experienced on
average a modest growth rate of 0.6 percent per annum over the period 1960-2000. In
order to reach the world’s average per capita income of 8,820 US dollars per annum at
its current rate of growth, it would need another 485 years. Even if the annual growth
rate were to increase to 1.8 percent (i.e., the world’s current average), it would need
161 years to close the gap. And if it were to grow at the rate of South Korea (the fastest
grower over the period concerned), it could close the gap in just 49 years. Persistent
spatial welfare disparities are a source of frustration for both economists and policy-
makers.

The present article is about regional economic development, in contrast to national

economic development. The difference between regions and countries is not always
very clear (for instance, several US states are larger that many countries in Europe), but
the major distinction in most cases is the fact that regions are open spatial entities (in
contrast to countries), while the competence of a region may normally be superseded by
the nation. Regions display a spatial subdivision of a country and are characterized by a
distinct degree of spatial diversity.

Regional development is clearly a multidimensional concept with a great

socioeconomic variety that is determined by a multiplicity of factors such as natural
resource endowments, quality and quantity of labor, capital availability and access,
productive and overhead investments, entrepreneurial culture and attitude, physical
infrastructures, sectoral structure, technological infrastructure and progress, open mind,
public support systems, and so forth.

The literature on regional development has usually centered around two dominant
issues: how is regional welfare created and how can we cope with undesirable
interregional welfare discrepancies? The first question is normally referred to as

2
‘allocative efficiency’ and addresses the economic issue of an optimal spatial-economic
use of scarce resources (i.e., inputs such as capital, labor, physical resources,
knowledge etc.) so as to generate a maximum value of output. The second question is
more of a socio-political equity nature and addresses the mechanisms and conditions
(economic, policy interventions) that may help to alleviate undesirable development
disparities in the space-economy. Normally, efficiently operating regions tend to grow
faster than regions with less favorable development conditions, so that there is an in-
built tension between efficiency and equity among a system of regions, at least in the
short run. It goes without saying that the efficiency-equity dilemma is one of the most
intriguing issues in regional development policy which has extensively been discussed
in the literature.

The present contribution aims to shed light on the complexity of regional development.
It will start off from the heart of regional economics, viz. location and allocation theory,
and will include an exposition on neo-classical factor endowment and infrastructure
theory (Section 2). Next, a more contemporaneous contribution will be offered on the
modern drivers of regional development, viz. knowledge and entrepreneurship, while
also paying attention to recent advances in endogenous growth and the new economic
geography (Section 3). In a subsequent section (Section 4) we will address more
explicitly the so-called convergence debate and the role of governments in regional
development policy. We will conclude with some retrospective and prospective
remarks.

2. Location of Human Activity and Regional Development

The history of mankind has exhibited an interesting geographic pattern, where

accessibility (e.g., river banks, coastal areas) and favorable physical-geographical
conditions (e.g., climate) were decisive factors for settlement. These areas created the
foundations for large agglomerations (such as New York, London, Tokyo or Venice).
Regional development appeared to be contingent upon the existence of large economic
attraction poles. Thus, location of economic activity created the foundations for
regional welfare. Even nowadays, persistent discrepancies in regional welfare have
historical roots in locational conditions of these high-potential areas. The present
figures of our world are still striking: approx. 1 billion people live on less than a dollar
per day, while more than 2 billion people have no access to adequate sanitation. And
the gap between poor and rich is formidable and even increasing. For example, the top
20% of the world’s population consumes about 85% of the world’s income, while the
bottom 20% lives on approx. 1.5% of the world’s income. And things get worse: a
generation ago, people in the top 20% were 30 times as rich as those in the bottom
20%; nowadays, they are more than 70 times as rich!

The location patterns of people and economic activity in our world show apparently a
great variation. And hence, location theory has played a central role in explaining not

3
only the dispersion of economic activity, but also the dispersion of welfare among
regions. Consequently, regional development theory is deeply rooted in location theory.

Location theory has already a long history in regional economics and economic
geography. Starting off from path-breaking ideas set forth by Von Thünen, Christaller,
Lösch, Isard, Hoover and many others, modern location theory has moved into a strong
analytical framework for regional economics and economic geography. Cost
minimization and profit maximization principles are integrated in a solid economic
setting, in which both partial and general spatial equilibrium studies on the space-
economy can be found that highlight the geographical patterns of industrial and
residential behavior. Furthermore, the theory is also able to encapsulate the impact of
public actors (e.g., regional development policy).

Thus, the fundamentals of classical location theory are made up of a blend of physical
geography (determining the accessibility of a location and the availability of resources)
and smart economic behavior (through a clever combination of production factors and
market potentials in space).

However, location patterns are never static, but have an endogenous impact on
newcomers. Thus, incumbent firms may attract others through scale, localization and
urbanization advantages (e.g., in the form of spatial-economic externalities in a
Marshallian district). Consequently, agglomerations tend to become self-reinforcing
spatial magnets impacting on the entire space-economy. Such concentrations of
economic activity create welfare spin-offs for a broader regional system and thus
determine the geographic patterns of welfare and regional development. In this context,
we may also observe a blend between location theory and urban economics or urban
geography.

In recent years, we have witnessed the emergence of the digital economy through
which actors could be networked world-wide. As a consequence, the interaction
between industrial networks and location as well as the access to telecommunication
networks has gained much interest. Locations that offer the best available network
services are the proper candidates for many firms in the ICT, high-tech and high-
services sectors and are able to generate a high value added to regional development.

The availability of and access to infrastructure is another critical success factor for
regional development. In addition to the presence of labor as capital on traditional
factor inputs, we observe an increasing interest in measuring the impact of
infrastructure on regional development. Especially in a world with shrinking distances,
space-time accessibility of regions becomes a critical determinant of relative regional-
economic positions. Transport economics and transport geography have offered an
abundance of theoretical and empirical evidence on the importance of physical
infrastructure for regional growth. The uneven provision of infrastructure have also
been identified as a key determinant of regional income disparities in less developed
countries, as is witnessed in various World Bank studies.

4
3. Entrepreneurship, Innovation and the Knowledge Economy

Since Marshall, Schumpeter and Kirzner we know that innovation and entrepreneurship
are the driving factors behind economic growth. There is an avalanche of literature on
the importance of entrepreneurship for enhancing the innovative capacity and growth
potential of regions.

Entrepreneurship is a complex and multi-faceted phenomenon that finds its roots in

risk-taking behavior of profit-seeking individuals in a competitive economy. But its
determinants have also clear correlations with gender, age, education, financial support
systems, administrative regulations, risk tolerance and market structures.
Entrepreneurship lies at the heart of innovation as the art of doing creative things for
the sake of competitive advantage. The debate on entrepreneurship and innovation has
– from a geographical perspective – prompted the emergence of new concepts such as
innovative regions, innovative milieus learning regions, or knowledge-based regions.
Innovation has become the critical survival factor in a competitive space-economy and
determines the direction and pace of regional development. A key aspect of innovation
in a modern space-economy is the use of and access to the information and
communication technology (ICT) sector. Consequently, ICT infrastructure is
increasingly seen as a necessary resource endowment for regional development.

It goes almost without saying that ICT is a necessary ingredient of a modern

knowledge-based economy. And that also holds for regions. Clearly, knowledge is a
composite good with many facets, but from an economic perspective knowledge serves
to enhance productivity and to induce innovations. There is indeed an ongoing debate
on the unidirectional or circular relationship between knowledge and development, and
this forms one of the central issues in endogenous growth theory (see Section 4).

Endogenous growth theory has played a central role in the growth debate since the
1990’s. The main idea of these new contributions is that technological progress is not
exogenously given, but an endogenous response of economic actors in a competitive
business environment. Consequently, in contrast to earlier macro-economic explanatory
frameworks, the emphasis is much more as individual economic behavior of firms. In
this way, it can be demonstrated that regional growth is not the result of exogenous
productivity-enhancing factors, but rather the outcome of deliberate choices of
individual actors (firms and policy-makers).

The importance of knowledge for innovation and entrepreneurship is thus increasingly

recognized. The spatial distribution of knowledge and its spill-overs are considered as
an important success factor for regional development in an open competitive economic
system. Thus, the geographical patterns of knowledge diffusion as well as the barriers
to access to knowledge are decisive for regional development in a modern global and

5
open space-economy. Consequently, knowledge policy – often instigated by ICT
advances – is a critical success factor for regional welfare creation.

Regional development policy appears to move increasingly towards knowledge and

innovation policy. In recent years, it is also convincingly demonstrated that leadership
and institutional qualities have a great impact on regional welfare, in particular, when
the role of leadership is linked with innovation and knowledge-creation. To the same
extent that innovative entrepreneurship is critical for long-term regional welfare
growth, governance and leadership are essential for a balanced regional development.
Leadership presupposes proactive behavior, visions for future development, awareness
of institutional and behavioral processes, responses and bottlenecks, as well as
acceptance by the population. The awareness of the importance of leadership and
entrepreneurship lies in with the recognition of creative actions and learning actors.
Studies on regional leadership are rare, but this is certainly a promising and important
new field of research.

In recent years, we have also witnessed the emergence of a new strand of literature,
coined the ‘new economic geography’, in the vein of endogenous growth theory.
Although the term ‘new economic geography’ is arguably not appropriate (most
concepts can already be found in the regional economics and regional science literature
since the 1950s), this seemingly new approach has attracted quite some attention within
the neoclassical economics literature. It marries the increasing-returns monopolistic
competition model with the micro-foundations of spatial-economic behavior, including
interregional trade. This recent approach emphasizes the importance of agglomeration
externalities (caused by increasing returns to scale) for regional welfare creation, in the
context of global competitive forces where trade (between regions or countries) plays a
critical role. This, regions are then part of a global competitive network system. Recent
contributions within this literature have found that agglomeration can be a welfare-
improving outcome for workers in both core and periphery regions, for instance, if
agglomeration raises the innovation rate. This result provides theoretical support for
regional development policies destined to support and enhance existing clusters of
specialization.

4. The Convergence Debate

Regions and nations in our world show complex development patterns. Textbook
economics would teach us that under conditions of free competition, homogeneity of
preference and technology parameters, and mobility of production factors all regions in
the space-economy would tend to a converge to the same per-capita income growth
rate. In neoclassical economic growth models, convergence between regions takes
place through capital accumulation. Regions that are further away from their state states
grow faster in the short run, but in the long run diminishing returns to capital set in and
the growth rate drops to the exogenous growth rate of technological progress. This
tends towards a situation where the growth rate of GDP per capita falls and becomes

6
constant (i.e., it becomes equal to the exogenously-determined technological growth
rate). The neo-classical growth models therefore predict that in the long run countries
and regions will converge in terms of per-capita income levels, if one controls for the
effects of differences in initial conditions.

A basic problem in the above neo-classical explanation of the world is that

technological progress is not exogenous ‘manna from heaven’. It is part of the complex
architecture of a regional economy and is determined by both internal and external
R&D investments, on-the-job training, learning by doing and spillovers from university
research. Spillovers resulting from R&D expenditures and other activities generate
increasing returns to scale for reproducible production factors, the existence of which
implies the possibility of long-run divergence in per-capita income levels.

The conflicting predictions of the neoclassical and endogenous growth models have
generated intense scrutiny and a plethora of empirical studies, known collectively as the
‘convergence debate’. The literature has generally found that while per-capita income
levels between the poorest countries (of Sub-Saharan Africa) and the richest countries
(Europe and the United States) have diverged over the past few decades, there is
convergence among countries that are similar in terms of initial conditions and policies,
for instance, among the countries of the European Union or the fast-growing East Asian
economies (a phenomenon known as ‘conditional convergence’). The evidence also
suggests that per-capita income levels among regions within countries have diverged
markedly in recent years, particularly in large, diverse countries such as India and
China. An increase in regional disparities in fast growing regions such as India and
China is not necessarily bad news, however. Improvements in living standards in vast
countries such as these implies that global inequality as a whole may be decreasing (in
tandem with improvement in living standards in these countries), and economic theory
suggests that an increase in agglomeration may lead to further improvements in the
long run, as knowledge spills-over into other regions and sectors of the economy. The
findings of the convergence literature therefore highlight the key role of regional
development policies in promoting economic growth and human development.

5. Regional Development Policy in Perspective

The policy response to regional inequality or spatial disparity is characterized by a great

variety all over the years. Several strands of literature can be distinguished, in
particular:

 supply-side policy of a Keynesian nature with a pronounced interest in public

spending in less privileged regions;

 growth pole strategies, with a clear emphasis on a concentrated growth impulse in

a few designated place or areas;

7
 infrastructure policy with the aim to create the necessary physical conditions (e.g.,
improvement of accessibility) in order to enhance the competitive capabilities of
regions;

 self-organizing policy where regions are encouraged to get their acts together on
the basis of indigenous strength with a limited role of governments;

 suprastructure policy in which regions are provided with favorable R&D

conditions, educational facilities, knowledge centers and the like in order to create
the conditions for a self-sustained development.

Regional policy has played an important role in shaping the European Union, as the
vast differences in regional development among European regions would weaken social
cohesion in Europe. The Structural Funds administered by the European Union, and in
particular, the Regional Development Fund, have been strategic vehicles to cope with
spatial disparities in Europe. It is noteworthy that the various above mentioned
explanatory frameworks for regional development differences have often been
incorporated in the policy responses on spatial disparities in Europe, including the
current interest in entrepreneurship and technological innovation.

An important contributor to regional development is technological progress, an

extensively studied topic in the recent economic growth literature. From a geographic
(regional, urban, or local) perspective, much attention has been paid to the spatial
conditions that induce technological progress (e.g., entrepreneurial climate, availability
of venture capital, incubator facilities etc.). Furthermore, also the spatial diffusion of
technology has obtained much attention, in particular in the geography literature. A
particular case of knowledge and technology diffusion can be found in foreign direct
investment (FDI). Several studies have demonstrated that FDI offers access to foreign
production processes, so interregional or multinational technology spillovers may
occur. These studies demonstrate clearly that the region is a dynamic player in an
intricate web of spatial-economic interactions. Regional development is not a static
phenomenon, but exhibits a dynamic pattern based on the interplay of various
stakeholders (the business sector, households/workers and governmental bodies), who
have to face the challenge put forward by an open space-economy.

Glossary

Endogenous growth: Growth of output in the economy that is driven by

long-run improvement of productivity of the
production factors, with this improvement being
sensitive to various aspects of the economy.

New economic geography: Axiomatic approach to formal mathematical modeling

of economic behavior of households and firms across

8
 space, allowing for imperfect competition and
resources required for spatial interaction.

Bibliography

Abreu, M. (2005) Spatial Determinants of Economic Growth and Technology Diffusion. Thela Thesis,
Amsterdam

Acs, Z., B. Carlsson and C. Karlsson (eds.) (1999) Entrepreneurship, Small- and Medium-Sized
Enterprises and the Macroeconomy. Cambridge University Press, Cambridge

Acs, Z., H. de Groot and P. Nijkamp (eds.) (2002) The Emergence of the Knowledge Economy. Springer-
Verlag, Berlin

Aghion, P., and P. Howitt 1998) Endogenous Growth Theory. MIT Press, Cambridge, MA

Asheim, B. (1996) Industrial Districts as ‘Learning Regions’. European Planning Studies 4(4): 379-400

Asheim, B. and M. Gertler (2005) The Geography of Innovation: Regional Innovation Systems. In: J.
Fagerberg, D.C. Mowery and R. Nelson (eds.) The Oxford Handbook of Innovation. Oxford University
Press, Oxford

Audretsch, D., A.R. Thurik, I. Verheul and S. Wennekers (eds.) (2002) Entrepreneurship: Determinants
and Policy in a European-US Comparison. Kluwer, Dordrecht

Baldwin, R. (1999) Agglomeration and Endogenous Capital. European Economic Review 43: 253-280

Baldwin, R.E., R. Forslid, P. Martin, G.I.P. Ottaviano and F. Robert-Nicoud (2003) Economic
Geography and Public Policy. Princeton University Press, Princeton

Benhabib, J. and M.M. Spiegel (1994) The Role of Human Capital in Economic Development. Evidence
from Aggregate Cross-country Data. Journal of Monetary Economics 34(2): 143-173

Brakman, S., H. Garretsen and C. van Marrewijk (2001) An Introduction to Geographical Economics.
Cambridge University Press, Cambridge

Barro, R., and X. Sala-i-Martin (1997) Technology Diffusion, Convergence and Growth. Journal of
Economic Growth 2: 1-27

Blakely, E.J. (1994) Planning Local Economic Development. Sage Publications, Thousand Oaks, CA

Cameron, R. (2005) Spatial Economic Analysis. Journal of Development Perspective 1(1): 146-163

Capello, R. (2006) Regional Economics. Routledge, London

Carr, D., J. Markusen and K. Maskus (2001) Estimating the Knowledge-Capital Model of the
Multinational Enterprise. American Economic Review 91(3): 693-708

Coe, D.T. and E. Helpman (1995) International R&D Spillovers. European Economic Review 39(5): 859-
887

9
Crozet, M. (2004) Do Migrants Follow Market Potentials? An Estimation of a New Economic
Geography Model. Journal of Economic Geography 4: 439-458

Davis, D. and J. Stiglitz (1977) Monopolistic Competition and Optimal Product Diversity. American
Economic Review 67: 297-308

Davis, D. and J-F. Thisse (2002) The Economics of Agglomeration. Cambridge University Press,
Cambridge

Davis, D. and D. Weinstein (1999) Economic Geography and Regional Production Structure: An
Empirical Investigation. European Economic Review 43: 379-407

De la Fuente, A. and R. Domenech (2006) Human Capital in Growth Regressions. Journal of the
European Economic Association 4(1): 1-36

Döring, Th. and J. Schnellenback (2006) What do we Know about Geographical Knowledge Spillover
and Economic Growth? Regional Studies 40(3): 375-395

Durlauf S.N. and D. Quah (1999) The New Empirics of Economic Growth. In: J.B. Taylor and M.
Woodford (eds.) Handbook of Macroeconomics 1A. North Holland, Amsterdam

Englmann, F.C. and U. Walz (1995) Industrial Centers and Regional Growth in the Presence of Local
Inputs. Journal of Regional Science 35: 3-27

Evans, P., Using Cross-Country Variances to Evaluate Growth Theories. Journal of Economic Dynamics
and Control 20: 1027-1049

Findlay, R. (1973) International Trade and Development Theory. Columbia University Press, New York

Fingleton, B. (ed.) (2003) European Regional Growth. Springer-Verlag, Berlin

Florida, R. (1995) Toward the Learning Region. Futures 27(5): 527-536

Fujita, M., P. Krugman and A. Venables (1999) The Spatial Economy. MIT Press, Cambridge, MA

Fujita, M. and J. Thisse (2003) Does Geographical Agglomeration Foster Economic Growth? And
Who Gains and Looses From It? Japanese Economic Review 54: 121-145

Grossman, G.M. and E. Helpman (1990) Comparative Advantage and Long-Run Growth. American
Economic Review 80: 796-815.

Hanson, G. (1996) Agglomeration, Dispersion and the Pioneer Firm. Journal of Urban Economics 39(3):
255-281

Heenan, D. and W.G. Bennis (1999) Co-leaders: The Power of Great Partnerships. John Wiley, New
York

Hofstede, G. (ed.) (1997) Cultures and Organizations. McGraw-Hill, New York

Judd, D. and M. Parkinson (eds.) (1990) Leadership and Urban Regeneration. Sage, Newbury Park

Islam, N. (2003) What Have We Learnt From the Convergence Debate? Journal of Economic Surveys
17(3): 309-362

10
Keeble, D. and F. Wilkinson (1999) Collective Learning and Knowledge Development in the Evolution
of Regional Clusters of High-Technology SMEs in Europe. Regional Studies 33: 295-303

Kirchhoff, B.A. (1994) Entrepreneurship and Dynamic Capitalism. Praeger, Westport, CT

Krugman, P. (1991) Increasing Returns and Economic Geography. Journal of Political Economy 99:
483-499

Lucas, R.E. (1988) On the Mechanics of Economic Development. Journal of Monetary Economics 22(1):
3-42

Malecki, E. (2000) Creating and Sustaining Competitiveness. In: J.R. Bryson, P.W. Daniels, N. Henry
and J. Pollard (eds.) Knowledge, Space, Economy. Routledge, London, pp. 103-119

Markusen, A. (1985) Profit Cycles, Oligopoly, and Regional Development. MIT Press, Cambridge, MA

Markusen, J. (2002) Multinational Firms and the Theory of International Trade. MIT Press, Cambridge,
MA

Martin, R. (1999) Public Policies, Regional Inequalities and Growth. Journal of Public Economics 73:
85-105

Martin, R. and G.I.P. Ottaviano (2001) Growth and Agglomeration. International Economic Review
42(4): 1003-1026

Naudé, W. (2005) Geographical Economics and Africa. Journal of Development Perspectives 1(1): 1-4

Neary, P. (2001) The New Economic Geography. Journal of International Literature 39: 536-561

Nijkamp, P. (2003) Entrepreneurship in a Modern Network Economy. Regional Studies 37: 395-405

Njikamp, P. and R. Stough (eds.) (2004) Entrepreneurship and Regional Economic Development.
Edward Elgar, Cheltenham

Puga, D. (1999) The Rise and Fall of Regional Inequalities. European Economic Review 43: 303-334

Redding, S. and A.J. Venables (2004) Economic Geography and International Inequality. Journal of
International Economics 62: 53-82

Rivera-Batiz, F. (1988) Increasing Returns, Monopolistic Competition, and Agglomeration Economies in

Consumption and Production. Regional Science and Urban Economics 18: 125-153

Romer, P. (1990) Endogenous Technological Change. Journal of Political Economy 98(2): 71-102

Romer, P.M. (1986) Increasing Returns and Long-run Growth. Journal of Political Economy 94(5):
1002-1037

Temple, J. (1999) The New Growth Evidence. Journal of Economic Literature 37(1): 112-156

Serageldin, I. (2006) Science; the Culture of Living Change. Bibliotheca Alexandrina, Alexandria

Simmie, J. (ed.) (1997) Innovation, Networks and Learning Regions. Jessica Kingsley, London

Stimson, R., R. Stough and H. Roberts (2006) Regional Economic Development. Springer-Verlag, Berlin

11
Stimson, R., R. Stough and M. Salazar (2005) Leadership and Institutional Factors in Endogenous
Regional Economic Development. Investigaciones Regionales 7: 23-52

Storey, D. (1994) Understanding the Small Business Sector. Routledge, London

World Bank (2006) World Development Report 2006: Equity and Development. Oxford University Press,
New York

Xu, B. (2000) Multinational Enterprises, Technology Diffusion, and Host Country Productivity Growth.
Journal of Development Economics 62(2): 477-493

Biographical Sketches

Peter Nijkamp: Doctorandus, econometrics, Erasmus University Rotterdam, The Netherlands, 1970;
PhD, regional planning, Erasmus University Rotterdam, The Netherlands, 1972.
Peter Nijkamp is Professor of Regional Economics, Faculty of Economics and Business Administration,
VU University Amsterdam, since 1973. He has been Visiting Professor in several universities in Europe,
North-America and Asia. He is a fellow of the Royal Netherlands Academy of Arts and Sciences
(KNAW) and of the Belgian Academy of Sciences. At present, he is President of the Governing Board of
the Netherlands Organization for Scientific Research (NWO).
Peter Nijkamp’s main research interests cover plan evaluation, multicriteria analysis, regional and urban
planning, transport systems analysis, mathematical modeling, technological innovation, and resource
management. In the past years he has focused his research in particular on quantitative methods for
policy analysis, as well as on behavioral analysis of economic agents. He has a broad expertise in the
area of public policy, services planning infrastructure management and environmental protection. In all
these fields he has published many book and numerous articles.
Professor Nijkamp is a member of editorial boards of some 30 international journals in the field of
regional and urban economics environmental management and transportation policy.

Maria Abreu: BSc in Economics, 1999, London School of Economics, United Kingdom; MPhil in
Economics, 2000, Tinbergen Institute, The Netherlands; PhD in Economics 2005, VU University
Amsterdam, The Netherlands.
Maria Abreu is Research Associate at the Centre for Business Research (CBR) of the University of
Cambridge, and Research Fellow of the Cambridge-MIT Institute. Since completing her PhD she briefly
worked for the World Bank, before joining the Programme on Regional Innovation of the Cambridge-
MIT Institute in 2006. Her research interests include regional economic growth, regional development
policies, spatial modelling of growth processes and the drivers of regional innovation.
She is currently working on an Economic and Social Research Council (ESRC) sponsored project on the
regional impact of university-industry interactions.

12