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The Role of Entry and Market Selection for the Dynamics of Regional Diversity and Specialization

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  • Florian Noseleit

Abstract

Noseleit F. The role of entry and market selection for the dynamics of regional diversity and specialization, Regional Studies. Despite predictions that economic integration leads to increasing specialization, the opposite development has been observed at the regional level. Based on nearly three decades of West German data, this paper addresses the diversification of regional economic activity and emphasizes the role of industry dynamics, specifically newly entering business cohorts. Although a strong sectoral specialization evolves in the entry cohorts within and between regions over time, entries substantially increase the overall diversity of regions. Market selection favoured less similar entries in comparison with the initial industry structure and, thus, allowed regional diversity to increase. Overall, the regional specialization processes within each entry cohort did not become less important; however, the fields of regional specialization changed continuously over time, resulting in more diversity.

Suggested Citation

  • Florian Noseleit, 2020. "The Role of Entry and Market Selection for the Dynamics of Regional Diversity and Specialization," Regional Studies, Taylor & Francis Journals, vol. 49(1), pages 76-94, July.
  • Handle: RePEc:taf:regstd:v:49:y:2020:i:1:p:76-94
    DOI: 10.1080/00343404.2012.708729
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    2. Jacob Rubæk Holm & Christian Richter Østergaard, 2018. "The high importance of de-industrialization and job polarization for regional diversification," Papers in Evolutionary Economic Geography (PEEG) 1821, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised May 2018.
    3. Dmitri Knatko & Galina Shirokova & Karina Bogatyreva, 2016. "Industry choice by young entrepreneurs in different country settings: the role of human and financial capital," Journal of Business Economics and Management, Taylor & Francis Journals, vol. 17(4), pages 613-627, July.
    4. Arauzo Carod, Josep Maria & Coll Martínez, Eva & Turcu, Camelia, 2018. "Where New Creative Industries Locate? Evidence from French Departments," Working Papers 2072/307042, Universitat Rovira i Virgili, Department of Economics.
    5. Josep-Maria Arauzo-Carod & Eva Coll-Martínez & Camelia Turcu, 2024. "Location attributes explaining the entry of firms in creative industries: evidence from France," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 72(1), pages 223-254, January.
    6. Michael Fritsch & Michael Wyrwich, 2023. "Entrepreneurship in the Long-Run: Empirical Evidence and Historical Mechanisms," Foundations and Trends(R) in Entrepreneurship, now publishers, vol. 19(1), pages 1-125, January.
    7. Steven Deller & Philip Watson, 2016. "Did Regional Economic Diversity Influence The Effects Of The Great Recession?," Economic Inquiry, Western Economic Association International, vol. 54(4), pages 1824-1838, October.
    8. Michael Fritsch & Sandra Kublina, 2018. "Related variety, unrelated variety and regional growth: the role of absorptive capacity and entrepreneurship," Regional Studies, Taylor & Francis Journals, vol. 52(10), pages 1360-1371, October.

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