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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 ()

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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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File URL: http://econ.geo.uu.nl/peeg/peeg0502.pdf
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Publisher 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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Related research
Keywords: evolutionary economic geography; new economic geography; economic variety;

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This paper has been announced in the following NEP Reports: References listed on IDEAS
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Steven Poelhekke, 2006. "Do Amenities and Diversity Encourage City Growth? A Link Through Skilled Labor," Economics Working Papers ECO2006/10, European University Institute. [Downloadable!]
  2. 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, Department of City and Regional Development, Vienna University of Economics and Business Administration. [Downloadable!]
  3. Guillaume Daudin & Jean-Luc Gaffard & Sandrine Levasseur & Caterine Mathieu & George Pujal & Michel Quéré & Henri Sterdinyak, 2005. "Competition from emerging countries, international relocation and their impacts on employment," Documents de Travail de l'OFCE 2005-09, Observatoire Francais des Conjonctures Economiques (OFCE). [Downloadable!]
  4. Joeri Gorter & Suzanne Kok, 2009. "Agglomeration Economies in the Netherlands," CPB Discussion Papers 124, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
  5. Raffaele Paci & Stefano 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. [Downloadable!]
  6. 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. [Downloadable!]
  7. 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. [Downloadable!]
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