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Abstract
Spillover is considered one of the key agents that robust the economy of any nation and that will accelerate the industrial dynamics of a nation. In this paper we studied the prevailing geographical spillovers and how it arose in the business cities of Tamil Nadu, India. The state Tamil Nadu is one of the top three recipients of Foreign Direct Investment (FDI) and fastest growing economy in India. With the foreign direct, indirect investment and the different industrial agglomeration make the cities of Tamil Nadu grew faster and faster. It created different kinds of spillover through out its business sphere and to the neighbouring/depending business cities as well states. In this study four cities had been taken with the different industrial background and we found technological spillover, knowledge spillover, Network spillover and Market spillover are highly dominate in those cities.
Keywords - Geographical Spillover, Business Cities, FDI, Technological spillover, Knowledge Spillover, Network Spillover, Market Spillover.
Introduction
Geographical spillovers refer to positive knowledge external effects produced by some located firms and affecting the production processes of firms located elsewhere. Local and global geographic spillover must be distinguished in order to have better understanding. Local geographic spillover means that production processes of the firm located in one region only benefit from the knowledge accumulation in that region. Knowledge accumulation in one region improves the productivity of all the firms whatever the region where they are located. Spillovers may also occur horizontally or vertically. Horizontal spillovers are intra-industry spillovers, implying that they occur across firms in the same industry and are of equal origin; for example, domestic firms. Spillovers on horizontal level may be the result of human capital turnover or technology sharing. Vertical spillovers are inter-industry spillovers, meaning that firms gain knowledge from suppliers or international knowledge sources (Motohashi et al., 2010).
Economic growth of the nation depends on its business cities and its dynamics. Because that we should understand what happened in that spatial to draft bills and to take some other constructive measures. There are three growth theories classical, neo classical and Keynesian. All theories deal the economic growth by different background. And every theory tells us there will be positive spillover by the industrial agglomeration in the geography. The rise of...