endogenous

Question 1

What does the ‘broad capital’ model emphasize regarding capital investment?

Answer 1

The ‘broad capital’ model emphasizes that capital investment can generate positive externalities beyond individual firms.

Question 2

What are externalities in the context of capital investment?

Answer 2

Externalities refer to positive effects that capital investment can have on the environment or the broader economy beyond the individual firm’s gains.

Question 3

What does the ‘human capital and learning by doing’ concept highlight?

Answer 3

The ‘human capital and learning by doing’ concept highlights the value of knowledge and skills and how learning can spill over to benefit others in the industry.

Question 4

How does investment in capital stock drive economic growth?

Answer 4

Investment in capital stock increases productive capacity, allowing for future growth and development.

Question 5

What are Schumpeterian notions of innovation?

Answer 5

Schumpeterian notions of innovation refer to the importance of innovation in driving economic growth, with temporary monopolistic returns for innovators.

Question 6

What is the significance of human capital investment in the ‘broad capital’ model?

Answer 6

Human capital investment enhances productivity and creates positive spill-over effects for both businesses and the broader economy.

Question 7

What evidence suggests about rapid regional growth and capital investment?

Answer 7

Rapid regional growth may be preceded by significant investments in fixed capital to support the growth.

Question 8

How does the ‘broad capital’ model view technological progress?

Answer 8

The ‘broad capital’ model views technological progress as a result of deliberate actions, not coincidental impacts of other activities.

Question 9

what does endogenous growth seek to understand

Answer 9

explaining the causes of technological progress and how it relates to economic growth.

Question 10

explain the causes of technological progress and how it relates to economic growth.

Answer 10

Technological change and innovation can lead to geographical spillovers, where knowledge and ideas spread from one region to another, impacting growth in different areas.
Example: Silicon Valley in California is known for its concentration of technology and innovation-driven industries. Technological advancements and new ideas developed in Silicon Valley have spillover effects, influencing the growth of nearby regions through the establishment of related businesses and technology transfer

Question 11

Endogenous growth and technological progress assumption with example

Answer 11

• technological progress is both a cause and an effect of economic growth. Innovation drives growth by increasing productivity and generating new opportunities, while economic growth itself provides the resources and incentives for further innovation.
  Example: The invention of the internet revolutionized communication and information exchange, leading to the rise of e-commerce. The growth of e-commerce, in turn, fueled more technological innovations, such as online payment systems and logistics solutions, contributing to economic growth.

Question 12

Technological change endogenous in the growth process

Answer 12

• Views technological change as an integral part of the growth process. Economic agents are encouraged to produce new ideas and innovations for profit.
• Example: Pharmaceutical companies invest heavily in research and development to develop new drugs. The development of innovative medicines leads to higher profits for these companies, encouraging further investments in R&D to discover more effective treatments.

Question 13

Explanatory factors for technological progress

Answer 13

Endogenous growth theory identifies several factors that explain technological progress, such as the number of workers in knowledge-producing industries, the existing stock of knowledge, technological transfer or diffusion, and the presence of knowledge-rich and creative environments.
Example: Research institutions and universities in a particular region foster a knowledge-rich environment. Collaboration among researchers and access to state-of-the-art facilities contribute to a higher rate of technological progress in that region.

Question 14

Endogenous growth theory acknowledgment of different regions

Answer 14

Endogenous growth theory acknowledges that different regions can experience varying rates of growth and technological progress based on their social capabilities to connect innovation with growth. Some regions may take the lead in adopting and applying new technologies, while others may lag behind due to social and economic factors.
Example: A city with a strong entrepreneurial culture, robust infrastructure, and a supportive business ecosystem might experience faster technological progress and attract more investments compared to a region with limited resources and a less conducive environment for innovation.

Question 15

What does endogenous growth theory emphasize in relation to local and regional development?

Answer 15

Endogenous growth theory emphasizes that economic growth and technological progress in local and regional areas are influenced by internal factors within the regions themselves, not just external factors.
Example: Let’s say there are two neighboring towns. Town A has many skilled and educated people, good schools, and research centers. Town B has fewer skilled people and fewer opportunities for education and innovation. According to endogenous growth theory, Town A is likely to experience more economic growth and technological advancements because it has the internal resources and capabilities (like skilled workers and knowledge centers) to drive progress from within. In contrast, Town B may struggle to grow as quickly because it lacks these internal factors that fuel development.

Question 16

What are Neo-Schumpeterian approaches and how do they relate to local and regional development?

Answer 16

Neo-Schumpeterian approaches focus on the role of innovation in driving economic growth. They highlight the importance of technological spillovers, where knowledge and ideas generated in one region can benefit other regions both within a country and internationally.

Question 17

How do technology and innovation impact local and regional development?

Answer 17

Technology and innovation can be shared and utilized by multiple entities without diminishing their value (non-rival) and are challenging to prevent others from benefiting from (non-excludable). However, the benefits of knowledge and innovations tend to be concentrated and bounded within certain geographic areas.

Question 18

What does it mean for regional development to be highly path-dependent?

Answer 18

Path dependence in regional development means that past choices, historical events, and temporary conditions can shape the future development trajectory of a region, making it difficult to change course quickly.

Question 19

How can patterns of specialization and economic success become locked-in in certain regions?

Answer 19

Once a region becomes specialized in a particular industry or economic activity, it can reinforce itself through external effects, making it difficult to diversify or change its economic structure.

Question 20

What role do policies and institutions play in local and regional development?

Answer 20

Policies related to taxation, subsidies, and public investments in infrastructure, education, and research and development can influence the attractiveness of regions for investments and their potential for growth.

Question 21

What are key areas of attention for policymakers to foster local and regional development?

Answer 21

Fiscal policies and public infrastructure are key areas of attention for policymakers to encourage investment, increasing returns, and spillover effects that drive regional growth.

Question 22

What does it mean to mobilize indigenous potential at the local and regional level?

Answer 22

Mobilizing indigenous potential means leveraging the existing resources, skills, and capabilities of a region to foster growth and innovation.

Question 23

What does geographical differentiation refer to in the context of local and regional development?

Answer 23

Geographical differentiation means that different regions have unique economic characteristics, resources, and potentials that require tailored development approaches.

Question 24

What challenges can lagging regions face in terms of development?

Answer 24

Lagging regions can suffer a ‘growth limbo,’ experiencing slow growth or backwardness, making it challenging to catch up with more developed areas.

Question 25

What factors influence local and regional development besides internal ones?

Answer 25

Local and regional development is influenced not only by internal factors but also by the connections and interactions with external markets, institutions, and global economic forces.

Question 26

What does endogenous growth theory consider regarding agglomerations and equity?

Answer 26

Endogenous growth theory examines how concentrated economic activities in certain regions (agglomerations) can affect the fairness of distributing economic benefits and opportunities (equity) across different areas.

Question 27

What is the ‘Donor-Recipient Model’ in traditional regional development policy?

Answer 27

The ‘Donor-Recipient Model’ refers to the traditional approach of redistributing resources from a central authority (donor) to less developed regions (recipients) to address their specific problems.
However, endogenous growth theory suggests that regional development policy should go beyond just addressing problems in lagging areas.
Example: Instead of only providing financial aid to underperforming regions, a new regional development policy might aim to stimulate growth and innovation in both growing and struggling regions, making each territory more self-sufficient and prosperous.

Question 28

What is the main focus of growth-oriented regional policy according to endogenous growth theory?

Answer 28

Growth-oriented regional policy aims to improve the economic performance of both growing and underperforming regions, supporting overall development across all territories.

Question 29

How does endogenous growth theory differ from traditional regional policy in terms of leveling up economic performance?

Answer 29

Endogenous growth theory emphasizes ‘levelling up,’ which means raising the economic performance of all regions to reduce disparities and promote balanced development, rather than focusing solely on redistributing resources from prosperous to lagging regions.
Example: Instead of channeling funds solely from successful regions to underperforming ones, a government may invest in improving education, technology, and infrastructure in all regions to ensure that each territory has the potential to grow and prosper independently.