Supraregional Relationships and Technology Development. A Spatial Agent-Based Model Study

Over the last couple of decades, firms increasingly acquire locally unavailable inputs in other regions, and are increasingly engaged in research collaboration with firms across the world. In this chapter, we propose and use a spatial agent-based model to study the significance of supraregional relationships on technological progress, in general, and on the emergence of core-periphery structures in particular. We propose a novel ‘artifact-transformation’ model for technology development and have agents (1) construct artifacts using inputs possibly acquired elsewhere and (2) search for transformations to produce these artifacts, possibly in collaboration with other agents. We find that core-periphery structures emerge mostly for certain spatial layouts of regions and if relationships are not completely global while there are many technological cross-links. Moreover, we find that if there are few technological cross-links, supraregional relationships hardly contribute to technological progress and only a weak core-periphery structure emerges at best. We also find that technological progress ultimately levels off in all circumstances.