This article aims to explore the context of the ”institutional turn” in Economic Geography and its implication to local development through reviewing relative concepts of institution and the mechanisms of its influences as well as transformation. We argue that institution could be regarded as the relevant medium that shapes different trajectories of local development and the outcome that been shaped. Furthermore, the institutional approach has much potential in exploring the spatial differentiation during the process of economic development, and it is helpful in investigating the factors of broader institutional transformation and the opportunities as well as limitations of local development.
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