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Heterogeneous relatedness and firm productivity

Author

Listed:
  • S. Stavropoulos

    (Erasmus University Rotterdam
    Erasmus Happiness Economics Research Organization)

  • F. G. Oort

    (Erasmus University Rotterdam
    Utrecht University)

  • M. J. Burger

    (Erasmus University Rotterdam
    Erasmus Happiness Economics Research Organization)

Abstract

In this manuscript, we relate regional structural composition—related and unrelated variety—to firm-level productivity in European regions, applying a Cobb–Douglas production function framework and using firm-, industry- and regional-level mixed hierarchical (multilevel) models. Our analyses indicate that regional-related variety has a positive impact on firm productivity in European regions, especially for firms in high-tech and medium-tech regions. These outcomes have implications for European policies on competitiveness as firms embedded in regions without these technological and institutional circumstances are systematically worse off in terms of productivity, and catching-up is not obvious for such regional economies.

Suggested Citation

  • S. Stavropoulos & F. G. Oort & M. J. Burger, 2020. "Heterogeneous relatedness and firm productivity," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 65(2), pages 403-437, October.
    • Handle: RePEc:spr:anresc:v:65:y:2020:i:2:d:10.1007_s00168-020-00988-2
    DOI: 10.1007/s00168-020-00988-2
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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
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models

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