IDEAS home Printed from https://ideas.repec.org/a/bla/jregsc/v58y2018i1p204-223.html

Sectoral diversification as insurance against economic instability

Author

Listed:
  • Jan Kluge

Abstract

This paper examines the extent to which sectoral diversification can act as an insurance mechanism against fluctuations in regional gross value†added growth rates. Portfolio theory is applied to the growth†instability properties of German districts. Furthermore, a comprehensive diversification measure is defined. Stochastic Frontier Analysis is deployed in order to estimate whether diversification allows regions to achieve more efficient growth†instability combinations. The results confirm that diversification does generate such effects. Spatial interactions do also play a role: The effects are less pronounced for regions whose economic performance is mainly driven by the surrounding regions.

Suggested Citation

  • Jan Kluge, 2018. "Sectoral diversification as insurance against economic instability," Journal of Regional Science, Wiley Blackwell, vol. 58(1), pages 204-223, January.
    • Handle: RePEc:bla:jregsc:v:58:y:2018:i:1:p:204-223
    DOI: 10.1111/jors.12349
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/jors.12349
    Download Restriction: no
    File URL: https://libkey.io/10.1111/jors.12349?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Xin Mai & Roger C. K. Chan & Chaoqun Zhan, 2019. "Which Sectors Really Matter for a Resilient Chinese Economy? A Structural Decomposition Analysis," Sustainability, MDPI, vol. 11(22), pages 1-17, November.
    2. Jan Kluge & Sarah Lappöhn & Kerstin Plank, 2023. "Predictors of TFP growth in European countries," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 50(1), pages 109-140, February.
    3. Jan Kluge, 2018. "Eine diversifizierte Wirtschaft als Versicherung gegen Krisen," ifo Dresden berichtet, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 25(05), pages 21-26, October.
    4. repec:ags:aaea22:343874 is not listed on IDEAS
    5. Bigerna, Simona & Bollino, Carlo Andrea & Polinori, Paolo, 2021. "Oil import portfolio risk and spillover volatility," Resources Policy, Elsevier, vol. 70(C).
    6. Xin Mai & Roger C. K. Chan, 2020. "Detecting the intellectual pathway of resilience thinking in urban and regional studies: A critical reflection on resilience literature," Growth and Change, Wiley Blackwell, vol. 51(3), pages 876-889, September.
    7. Kim, Kyumin & Reimer, Matthew, 2024. "Fisheries Diversification and Local Economic Stability: Evidence from Alaskan Fishing Communities," 2024 Annual Meeting, July 28-30, New Orleans, LA 343874, Agricultural and Applied Economics Association.
    8. Kurt A. Hafner, 2020. "Diversity of industrial structure and economic stability: evidence from Asian gross value added," Asia-Pacific Journal of Regional Science, Springer, vol. 4(2), pages 413-441, June.
    9. M. Yu. Malkina, 2022. "The Resilience of the Russian Regional Economies to the 2020 Pandemic," Regional Research of Russia, Springer, vol. 12(3), pages 309-320, September.
    10. Marina Malkina, 2019. "How Change in Industry Mix Can Improve the Financial Performance of Regional Economies: Evidence from the Portfolio Approach," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 67(6), pages 1561-1575.
    11. Marina Yurievna Malkina, 2018. "Instability of Financial Return of Regional Economies and Its Determinants," Spatial Economics=Prostranstvennaya Ekonomika, Economic Research Institute, Far Eastern Branch, Russian Academy of Sciences (Khabarovsk, Russia), issue 3, pages 88-114.
    12. Coulombe, Raphaelle G. & Rao, Akhil, 2025. "Fires and local labor markets," Journal of Environmental Economics and Management, Elsevier, vol. 130(C).
    13. Kluge, Jan & Lappoehn, Sarah & Plank, Kerstin, 2020. "The Determinants of Economic Competitiveness," IHS Working Paper Series 24, Institute for Advanced Studies.

    More about this item

    JEL classification:

    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jregsc:v:58:y:2018:i:1:p:204-223. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0022-4146 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.