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Variety and regional economic growth in the Netherlands

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Author Info

  • Koen Frenken

    ()

  • Frank G. van Oort

    ()

  • Thijs Verburg
  • Ron A. Boschma

    ()

Abstract

In economic theory, one can distinguish between variety as a source of regional knowledge spillovers, called Jacobs externalities, and variety as a portfolio protecting a region from external shocks. We argue that Jacobs externalities are best measured by related variety (within sectors), while the portfolio argument is better captured by unrelated variety (between sectors). We introduce a methodology based on entropy measures to compute related variety and unrelated variety. Using data at the COROP level for the period 1996-2002, we find that Jacobs externalities enhance employment growth, while unrelated variety dampens unemployment growth. Productivity growth, by contrast, can be explained by traditional determinants including investments and R&D expenditures. Implications for regional policy in The Netherlands follow.

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Bibliographic Info

Paper provided by Utrecht University, Section of Economic Geography in its series Papers in Evolutionary Economic Geography (PEEG) with number 0502.

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Length: 59 pages
Date of creation: Dec 2004
Date of revision: Dec 2004
Handle: RePEc:egu:wpaper:0502

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Keywords: evolutionary economic geography; new economic geography; economic variety;

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References

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Citations

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Cited by:
  1. Steven Poelhekke, 2006. "Do Amenities and Diversity Encourage City Growth? A Link Through Skilled Labor," Economics Working Papers ECO2006/10, European University Institute.
  2. Jürgen Essletzbichler, 2005. "Diversity, stability and regional growth in the U.S. (1975-2002)," Papers in Evolutionary Economic Geography (PEEG) 0513, Utrecht University, Section of Economic Geography, revised Sep 2005.
  3. Joeri Gorter & Suzanne Kok, 2009. "Agglomeration economies in the Netherlands," CPB Discussion Paper 124, CPB Netherlands Bureau for Economic Policy Analysis.
  4. Backman, Mikaela & Kohlhase, Janet, 2013. "The Influence of Diversity on the Formation, Survival and Growth of New Firms," Working Paper Series in Economics and Institutions of Innovation 337, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
  5. Sierdjan Koster, 2011. "Individual foundings and organizational foundings: their effect on employment growth in The Netherlands," Small Business Economics, Springer, vol. 36(4), pages 485-501, May.
  6. Amanda Mackloet, 2006. "Locational Dynamics in an Era of Global Economic Change: Is the Port of Rotterdam Up to the Challenge?," ERSA conference papers ersa06p337, European Regional Science Association.
  7. Salazar, Xavier & Atienza, Miguel, 2010. "Las empresas en Santa Cruz, ¿continúan en una estructura monocéntrica?," Revista Latinoamericana de Desarrollo Economico, Instituto de Investigaciones Socio-Económicas (IISEC), Universidad Católica Boliviana, issue 13, pages 59-90.
  8. Georges Pujals & Guillaume Daudin & Michel Quéré & Catherine Mathieu & Sandrine Levasseur & Jean-Luc Gaffard & Henri Sterdyniak, 2005. "Competition from emerging countries, international relocation and their impacts on employment," Sciences Po publications 2005-9, Sciences Po.
  9. Giulio Cainelli & Eleonora Di Maria & Roberto Ganau, 2011. "Agglomeration, related-variety and internationalisation. Does a relationship exist?," Openloc Working Papers 1114, Public policies and local development.
  10. Karl-Johan Lundquist & Lars-Olof Olander & Martin Svensson Henning, 2008. "Creative destruction and economic welfare in Swedish regions: Spatial dimensions of structural change, growth and employment," SRE-Disc sre-disc-2008_03, Institute for the Environment and Regional Development, Department of Socioeconomics, Vienna University of Economics and Business.
  11. R. Paci & S. Usai, 2006. "Agglomeration economies and growth-The case of Italian local labour systems, 1991-2001," Working Paper CRENoS 200612, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.

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