Some Notes on Institutions in Evolutionary Economic Geography

Abstract

Within the evolutionary economic geography framework, the role of institutions deserves more explicit attention. We argue that territorial institutions are to be viewed as orthogonal to organizational routines since each territory is characterized by a variety of routines and a single firm can apply its routines in different territorial contexts. It is therefore meaningful to distinguish between institutional economic geography and evolutionary economic geography as their explanans is different. Yet the two approaches can be combined in a dynamic framework in which institutions coevolve with organizational routines, particularly in emerging industries. Furthermore, integrating the evolutionary and institutional approach allows one to analyze the spatial diffusion of organizational routines that mediate conflicts among social groups, in particular, those between employers and employees. An evolutionary economic geography advocates an empirical research program, both qualitative and quantitative, that can address the relative importance of organizational routines and territorial institutions for regional development.

Key Words:

• evolutionary economic geography
• institutions
• routines
• innovation system
• power

Notes

1 In this context, the study by Strambach (forthcoming) is worth noting. She argued that institutional systems are not necessarily coherent in themselves but are subject to institutional plasticity, meaning that a range of options for new paths are open within the overarching institutional system. Creative agents can deviate from the established path in a deliberate and purposeful manner, creating new institutions but not necessarily breaking with the institutional system. As Strambach showed, plasticity explains how the customized business software sector in Germany could develop in an unfavorable and incompatible institutional setting at the national level.