Firm Networks, Globalization, and Inter-Regional Divergence: A Relational Perspective on Uneven Economic Development

Authors: Harald Bathelt*, University of Toronto, Maximilian Buchholz, University of Toronto
Topics: Economic Geography, Urban and Regional Planning, Business Geography
Keywords: international connectivity, local connectivity, national connectivity, United States, urban system, urban income
Session Type: Paper
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This paper argues that urban income levels and development are not just dependent on local factor endowments but are instead dependent upon a larger fabric of economic linkages at the local, national and international level. Focusing on CBSAs (core-based statistical areas) in the United States, this paper identifies the patterns of firms’ ownership networks between cities that form a basic architecture through which crucial knowledge flows and transaction relations unfold. We argue that it is through these channels that innovation processes are stimulated and growth impulses transferred which impact urban income development. For the period from 1993 through 2017, we first trace how changes in firms’ ownership networks are related to qualitative understandings of inter-regional inequality and divergence. We then develop a model that tests the impact of local, national and international connectivity on urban income levels.

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