Productive agglomeration and diversification: a focus on information technology services

Abstract

The aim of this paper is to investigate how externalities from diversified regions generate benefits for the clustering firms, by analyzing information technology industry in the Metropolitan Region of São Paulo. We mapped IT activities throughout Brazil and collected data through interviews at local IT firms. The assumption is that externalities in diversified cities and specialized cities are different to one another. The results have demonstrated the roles of diversification externalities and face-to-face contact in enabling interactive learning processes, which involves the exchange of tacit knowledge. The contribution of this paper is to present new empirical evidence on the positive externalities in diversified regions.

Keywords:
Diversification; Agglomeration externalities; Information Technology; Geography of Innovation