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How does labour mobility affect the performance of plants? The importance of relatedness and geographical proximity

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  • Ron Boschma
  • Rikard Eriksson
  • Urban Lindgren

Abstract

This paper analyses the impact of skill portfolios and labour mobility on plant performance by means of a unique database that connects attributes of individuals to features of plants for the whole Swedish economy. We found that a portfolio of related competences at the plant level increases significantly productivity growth of plants, in contrast to plant portfolios consisting of either similar or unrelated competences. Based on the analysis of 101,093 job moves, we found that inflows of skills that are related to the existing knowledge base of the plant had a positive effect on plant performance, while the inflow of new employees with skills that are already present in the plant had a negative impact. Our analyses also show that geographical proximity influences the effect of different skill inflows. Inflows of unrelated skills only contribute positively to plant performance when these are recruited in the same region. Labour mobility across regions only has a positive effect on productivity growth of plants when this concerns new employees with related skills.
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Suggested Citation

  • Ron Boschma & Rikard Eriksson & Urban Lindgren, 2009. "How does labour mobility affect the performance of plants? The importance of relatedness and geographical proximity," Journal of Economic Geography, Oxford University Press, vol. 9(2), pages 169-190, March.
  • Handle: RePEc:oup:jecgeo:v:9:y:2009:i:2:p:169-190
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    File URL: http://hdl.handle.net/10.1093/jeg/lbn041
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    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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