2011 | 4 | 1-2 | 75-95
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A line of argument in the new growth economy discussions is whether specialization or diversification of economic activity on the geographical scale stimulates innovation. This study explores the relation between innovativeness and different types of geographical concentrations in the case of a developing country. The study addresses the discussion through statistical and econometric analyses using variables such as number of patents, new firm entry and exit at the regional level for the period 1995-2001. The results do not confirm that regions with higher levels of related variety or specialization are more innovative, but instead regions with higher levels of variety are found to be more innovative supporting the diversity thesis.
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