Add to ORKGThis paper extends the Brezis, Krugman and Tsiddon (1993) Ricardian leapfrogging model by introducing geographically mobile capital and allowing for a wider variety of devel-opment patterns. In a two-region economy localized learning-by-doing causes specialization and uneven development. Technological change reverses the existing development pattern if the new technology locates in the low-wage region. However, the development pattern may also get reinforced if spillovers between the old and the new technology make the leading region a more attractive location. Capital ows are explicitly analyzed and it is furthermore shown that inter-regional transfers may reduce the chance of take-o