Related Variety, Unrelated Variety and Regional Functions: A spatial panel approach
AbstractThe paper presents estimates for the impact of related variety, unrelated variety and the functions a region performs in the production process on regional employment growth in Germany. We argue that regions benefit from the existence of related activities that facilitate economic development. Thereby the sole reliance of the related and unrelated variety concept on standard industrial classifications (SIC) remains debatable. We offer estimations for establishing that conceptual progress can be made when the focus of analysis goes beyond solely considering industries. We develop an industry-function based approach of related and unrelated variety and test our hypothesis by the help of spatial panel approach. Our findings suggest that related variety as same as unrelated variety facilitate regional employment growth in Germany. However, the drivers behind these effects do differ. While the positive effect of related variety is driven by high degrees of relatedness in the regional “R&D” and “White-Collar”-functions, the effects of unrelated variety are spurred by “Blue Collar”-functions in this period.
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Bibliographic InfoPaper provided by Utrecht University, Section of Economic Geography in its series Papers in Evolutionary Economic Geography (PEEG) with number 1301.
Length: 24 pages
Date of creation: Jan 2013
Date of revision: Jan 2013
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-02-16 (All new papers)
- NEP-GEO-2013-02-16 (Economic Geography)
- NEP-URE-2013-02-16 (Urban & Real Estate Economics)
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