Core and periphery from a valuation perspective

Abstract

The difference in performance between cores and peripheries is less driven by innovative capabilities, but by the ability to define what is of value and what is not. We use art fairs as analogy to derive assumptions about how valuation between core and periphery differs.

Abstract: The difference in performance between cores and peripheries is usually explained by differences in innovation capabilities (Jacobs 1970). However, several studies show that the periphery is not per se less innovative and that innovation is not sufficient to explain core-periphery patterns (Fritsch and Wyrwich 2021). Moreover, studies show that valuation processes also differ between core and periphery, with the definition of what is valuable usually taking place in the center (Grabher 2018).

Using a qualitative case study of two art fairs, we derive assumptions about how processes of valuation shape center-periphery patterns: The field of art is the main example for studying such processes; art fairs allow us to examine the role of geographic proximity in valuation processes; and comparing Art Basel as a leading global fair and SCOPE as a lower-category fair allows us to draw conclusions about center and periphery (Haisch and Menzel 2022).

We derive the following assumptions about what distinguishes the center (Art Basel) from the periphery (Scope): First, valuation depends on resources and is influenced by an ecosystem of actors and “devices” that bring information about how to value something. Second, it is not diversity per se that distinguishes the center from the periphery, but the diversity of places that allows actors to agree on common “principles of equivalence”. Third, this ecosystem specifically reduces uncertainty in the center about what is of value. Fourth, an resulting from the third point, valuations in the center provide stronger signals for valuations elsewhere than valuation processes in the periphery.

References

Fritsch, Michael/Wyrwich, Michael (2021). Is innovation (increasingly) concentrated in large cities? An international comparison. Research Policy 50 (6), 104237. https://doi.org/10.1016/j.respol.2021.104237.

Grabher, Gernot (2018). Marginality as strategy: Leveraging peripherality for creativity. Environment and Planning A: Economy and Space 50 (8), 1785–1794. https://doi.org/10.1177/0308518X18784021.

Haisch, Tina/Menzel, Max-Peter (2022). Temporary markets: Market devices and processes of valuation at three Basel art fairs. Environment and Planning A: Economy and Space 27 (4), 0308518X2211283. https://doi.org/10.1177/0308518X221128309.

Jacobs, Jane (1970). The economy of cities. New York, Vintage.