Papers in Evolutionary Economic Geography

April 5, 2016

# 16.06 Inter-industry labor flows

Filed under: 2016 — Tags: , , , , , — mattehartog @ 1:31 am

Frank Neffke, Anne Otto, Antje Weyh

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Labor flows across industries reallocate resources and diffuse knowledge among economic activities. However, surprisingly little is known about the structure of such inter-industry flows. How freely do workers switch jobs among industries? Between which pairs of industries do we observe such switches? Do different types of workers have different transition matrices? Do these matrices change over time? Using German social security data, we generate stylized facts about inter-industry labor mobility and explore its consequences. We find that workers switch industries along tight paths that link industries in a sparse network. This labor-flow network is relatively stable over time, similar for workers in different occupations and wage categories and independent of whether workers move locally or over larger distances. When using these networks to construct inter-industry relatedness measures they prove better predictors of local industry growth rates than co-location or input-based alternatives. However, because industries that exchange much labor typically do not have correlated growth paths, the sparseness of the labor-flow network does not necessarily prevent a smooth reallocation of workers from shrinking to growing industries. To facilitate future research, the inter-industry relatedness matrices we develop are made available as an online appendix to this paper.

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December 21, 2013

# 13.26 Which Types of Relatedness Matter in Regional Growth? Industry, occupation and education

Filed under: 2013 — Tags: , , , , — mattehartog @ 6:05 pm

Sofia Wixe and Martin Andersson

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This paper provides a conceptual discussion of relatedness, which suggests a focus on individuals as a complement to firms and industries. The empirical relevance of the main arguments are tested by estimating the effects of related and unrelated variety in education and occupation among employees, as well as in industries, on regional growth. We show that for regional productivity growth, occupational and educational related variety matter over and above industry relatedness. This supports the conceptual discussion put forward. The potential of productive interactions between employees in a region is thus greater when there is related variety in their ‘knowledge base’. We also find that related variety in industries is positive for employment growth but negative for productivity growth.

October 14, 2013

# 13.18 Labour market externalities and regional growth in Sweden: The importance of labour mobility between skill-related industries

Boschma, R., R.H. Eriksson and U. Lindgren

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This study investigates the relationship between labour market externalities and regional growth based on real labour flows. In particular, we test for the importance of labour mobility across so-called skill-related industries. We make use of a sophisticated indicator that measures the degree of skill-relatedness between all industries, and we employ actual labour flows between 435 4-digit industries within 72 Swedish functional labour market regions to estimate how labour market externalities are related to regional growth in the period 1998-2002. Both our fixed effect models and GMM-estimates demonstrate that a strong intensity of intra-regional labour flows between skill-related industries impacts positively on regional productivity growth, but less so on regional employment growth. Labour mobility between unrelated industries tends to dampen regional unemployment growth while a high degree of intra-industry labour flows is only found to be associated with rising regional unemployment.

February 12, 2012

# 12.03 Regional variety and employment growth in Italian labour market areas: services versus manufacturing industries

Filed under: 2012 — Tags: , , , , — mattehartog @ 6:00 pm

Francesca Mameli, Simona Iammarino, Ron Boschma

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This paper investigates the impact of regional sectoral diversity on regional employment growth in Italy over the period 1991-2001. Assuming that externalities may be stronger between industries selling similar products or sharing the same skills and technology (i.e. related industries), we analyze the role of different forms of sectoral variety at the Local Labour System (LLS) level. Our results show strong evidence of a general beneficial effect of a diversified sectoral structure but suggest also the need to differentiate the analysis between manufacturing and services. In particular, overall local employment growth seems to be favoured by the presence of a higher variety of related service industries, while no role is played by related variety in manufacturing. When looking at diversity externalities between macro-aggregates, the service industry is affected by related variety in manufacturing, while no evidence of externalities is found from tertiary sectors to manufacturing.

October 25, 2010

#10.12 Related variety and regional growth in Spain

R. Boschma and A. Minondo and M. Navarro

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This paper investigates whether related variety, among other types of spatial externalities, affected regional growth in Spain at the NUTS 3 level during the period 1995-2007. We found evidence that related variety matters for growth across regions, especially when measured with the assistance of the Porter’s cluster classification and the proximity index proposed by Hidalgo et al.. That is, Spanish provinces with a range of industries that are technologically related tend to show higher economic growth rates, controlling for the usual suspects. We did not find, however, any evidence of regional growth effects that come from technologically related sectors imports.

September 25, 2009

#09.12 Evolutionary economic geography and its implications for regional innovation policy

Ron Boschma

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Related variety is important to regional growth because it induces knowledge transfer between complementary sectors at the regional level. This is accomplished through three mechanisms: spinoff dynamics, labor mobility and network formation. They transfer knowledge across related sectors, which contributes to industrial renewal and economic branching in regions. Since these mechanisms of knowledge transfer are basically taking place at the regional level, and because they make regions move into new growth paths while building on their existing assets, regional innovation policy should encourage spinoff activity, labor mobility and network formation. Doing so, policy builds on region-specific assets that provides opportunities but also sets limits to what can be achieved by policy. Public intervention should neither apply ‘one-size-fits-all’ approaches nor adopt ‘picking-the- winner’ strategies, but should aim to connect complementary sectors and exploit related variety as a source of regional diversification.

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