A Model of Local Development

The paper presents a model which describes the growth dynamics of a local system in which there are two populations of firms: 1) local producers and subcontractors and 2) exporting firms. The system’s innovation capacity derives from the presence of exporting firms that “capture” changes and opportunities in external market. Its productivity derives from the cooperation between exporting firms and subcontractors, as in a classical district. We describe through the dynamic of the model when and why there can be low level equilibrium traps in local systems, when the cooperation between local producer and exporters doesn’t grow, and finally when then local system has an equilibrated and positive dynamic of growth