On the supply‐side determinants of regional growth.

The major developments in thought regarding regional economic growth and development are traced over the last two decades. The supply‐side micro‐foundations of regional growth have come under scrutiny in a manner which has previously not been evident. In particular, an examination of the elements of industrial clustering, regional industrial structure, and place characteristics which may promote innovation, have become a central focus of modern regional growth analysis. The micro‐foundations of these arguments are analysed, and the links between innovation and clustering explored within a transactions‐costs framework. This allows us to point to areas in which our understanding has grown over recent years, and to identify further areas of analysis which are required. [ABSTRACT FROM AUTHOR]