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From Manufacturing to Retail? – Cross-Border Shopping and Economic Restructuring in West Sweden

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  • Svante Karlsson
  • Urban Lindgren

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    Abstract

    This paper investigates the geography of cross-border shopping along the border between Norway and Sweden. Border regions and cross-border shopping have become a subject of considerable interest in the ongoing process of integration in the European union. A result of this transformation process, besides the removal of national barriers, is a development of a greater economic and political transborder cooperation, which is expressed by flows of labour and goods. The border between Norway and Sweden is no exception since movements of labour and goods are genuinely associated with the region. However, the cross-border shopping and the inter-regional labour market have increased rapidly in recent years in a significant way. The reasons have to do with a strong economic growth in Norway, more specifically in the Oslo region, while the Swedish side of the border has been a periphery in the national context. Thus the Norwegians shows a high purchasing power, while wages and real estate are relatively low priced in Sweden. It is precisely these differences that create space for profitable economic activity on one side but notin the other. In this paper, a longitudinal individual database (ASTRID) is used to identify flows of labours. The aim of the paper is to investigate regional processes of economic restructuring potentially influencing labour markets close to the border. In particular, we analyse the interplay between changes in relative importance of different economic sectors on the one hand, and individuals' job mobility patterns on the other. Is it the case that decreased labour demand in the manufacturing industries has triggered job mobility to the growing retail sector? Or is the case that the new labour market situation is cleared by inter-regional job mobility or by changed patterns of labour market participation? The results show that retail and cross-border shopping in recent years have become a huge part of the labour market at the Swedish side of the border. A transformation from an economy based on manufactoring, small scale engineering and traditional basic industries to high levels of service is the regional outcome. Keywords: Labour market dynamics, Cross-border shopping, Retail geography, Economic restructuring

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    Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa10p992.

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    Date of creation: Sep 2011
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    Handle: RePEc:wiw:wiwrsa:ersa10p992

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    1. Ohsawa, Yoshiaki, 1999. "Cross-border shopping and commodity tax competition among governments," Regional Science and Urban Economics, Elsevier, Elsevier, vol. 29(1), pages 33-51, January.
    2. ANDRZEJ CIEŚLIK, 2005. "Location Of Foreign Firms And National Border Effects: The Case Of Poland," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, Royal Dutch Geographical Society KNAG, vol. 96(3), pages 287-297, 07.
    3. Mark Skidmore & Mehmet Serkan Tosun, 2005. "Cross-Border Shopping and the Sales Tax: A Reexamination of Food Purchases in West Virginia," Working Papers, UW-Whitewater, Department of Economics 05-07, UW-Whitewater, Department of Economics.
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