Papers in Evolutionary Economic Geography

May 31, 2018

# 18.23 Does related variety affect regional resilience? New evidence from Italy

Filed under: 2018 — Tags: , , , — T.Broekel @ 3:45 pm

Giulio Cainelli & Roberto Ganau & Marco Modica

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Abstract: Although several contributions have studied the effect of related variety on the economic performance of firms and regions, its influence on regional resilience – that is, regions’ capacity to adapt to external shocks – has received little attention. This paper contributes to this debate by analysing empirically the relationship between related variety and regional resilience at the Italian Local Labour Market (LLM) level. The analysis adopts the definition of regional resilience developed by Martin (2012), and employs spatial econometric techniques − besides standard non-spatial models − to analyse the role played by related variety as a short-run shock absorber with respect to the 2008 Great Recession. The results obtained from the estimation of Spatial Error Models suggest that LLMs characterised by a higher level of related variety have shown a higher capacity to adapt to an external shock, that is, the Great Recession. This evidence is confirmed with respect to two different short-run time horizons, the one-year period 2012-2013 and the three-year period 2010-2013.

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#18.22 Industrial Relatedness and Regional Resilience in the European Union

Filed under: 2018 — Tags: , , , — T.Broekel @ 3:42 pm

Giulio Cainelli & Roberto Ganau & Marco Modica

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Abstract: The 2008 Great Recession prompted interest in the concept of regional resilience. This paper discusses and empirically investigates the relationship between industrial relatedness and economic resilience across European Union regions over the 2008-2012 crisis period. The analysis focuses on two types of industrial relatedness: technological and vertical (i.e. market-based). The empirical analysis is performed on a sample of 209 NUTS-2 regions in 16 countries. Our results highlight a positive effect of technological relatedness on the probability of resilience in the very short run (i.e. the 2008-2009 period), while the negative effect of vertical relatedness seems to persist for longer.

April 30, 2016

# 16.08 Resilience in the European Union: the effect of the 2008 crisis on the ability of regions in Europe to develop new industrial specializations

Jing Xiao, Ron Boschma, Martin Andersson

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This paper adopts an evolutionary framework to the study of industrial resilience. We present a study on European regions and assess the extent to which the capacity of their economies to develop new industrial specializations is affected by the global economic crisis of 2008. We compare levels of industry entry in European regions in the period 2004-2008 and 2008-2012, i.e. before and after a major economic disturbance. Resilient regions are defined as regions that show high entry levels or even increase their entry levels after the shock. Industrial relatedness and population density exhibit a positive effect on regional resilience, especially on the entry of knowledge-intensive industries after the shock, while related variety per se shows no effect on regions being resilient or not.

May 13, 2015

# 15.11 How do regional economies respond to crises? The geography of job creation and destruction in Sweden (1990-2010)

Filed under: 2015 — Tags: , , , , — mattehartog @ 6:36 pm

Rikard H. Eriksson and Emelie Hane-Weijman

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By means of Swedish longitudinal micro-data, the aim of this paper is to analyse how regional economies respond to crises. This is made possible by linking gross employment flows to the notion of regional resilience. Our findings indicate that despite a steady national employment growth, only the three metropolitan regions show higher employment figures than before the recession of 1990. Further, we can show evidence of high levels of job creation and destruction in both declining and expanding regions and sectors, and that the creation of jobs is mainly attributable to employment growth in incumbent firms while job destruction is primarily due to exits and micro-plants. Although the geography of resistance to crises and the ability of adaptability in the aftermath vary, our findings suggest that cohesive (i.e., with many skill-related industries) and diverse (i.e., with a high degree of unrelated variety) regions are more resilient over time. We also find that resistance to future shocks (e.g., the 2008 recession) is highly dependent on the resistance to previous crises. In all, this suggests that the long-term evolution of regional economies also influences their future resilience.

August 26, 2012

# 12.15 The Resilience of Dutch Regions to Economic Shocks. Measuring the relevance of interactions among firms and workers.

Dario Diodato and Anet Weterings

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Although increasing attention is paid to the resilience of regions to economic shocks, theoretical and empirical insights in the determinants of regional resilience are still limited. This paper aims to make a first step in quantifying regional resilience. Using a model, we explore how three regional factors jointly contribute to the resilience of regions to economic shocks: 1) the network of buyer-supplier relationships within and between regions, 2) the level of relatedness between industries, which facilitates intersectoral labor mobility and, 3) the geographical position of a region which determines the possibilities of commuting for workers. The supply network mainly determines the propagation of the shock, while possibilities for intersectoral and interregional labor mobility affect a regional economy’s capacity to recover from the shock. To illustrate the workings of the model, it is applied to the case of the Netherlands using data on buyer-supplier relationships within and between Dutch regions, as well as on intersectoral and interregional labour mobility.

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