IDEAS home Printed from https://ideas.repec.org/p/ags/motuwp/290391.html

Relatedness, Complexity and Local Growth

Author

Listed:
  • Divies, Benjamin
  • Mare, David C.

Abstract

We derive a measure of the relatedness between economic activities based on weighted correlations of local employment shares, and use this measure to estimate city and activity complexity. Our approach extends discrete measures used in previous studies by recognising the extent of activities' local over-representation and by adjusting for differences in signal quality between geographic areas with different sizes. We examine the contribution of relatedness and complexity to urban employment growth, using 1981–2013 census data from New Zealand. Complex activities experienced faster employment growth during our period of study, especially in complex cities. However, this growth was not significantly stronger in cities more dense with related activities. Relatedness and complexity appear to be most relevant for analysing how large, complex cities grow, and are less informative for understanding employment dynamics in small, less complex cities.

Suggested Citation

  • Divies, Benjamin & Mare, David C., 2019. "Relatedness, Complexity and Local Growth," Motu Working Papers 290391, Motu Economic and Public Policy Research.
    • Handle: RePEc:ags:motuwp:290391
    DOI: 10.22004/ag.econ.290391
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/290391/files/19_01.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.290391?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. is not listed on IDEAS
    2. Balland, Pierre-Alexandre & Boschma, Ron, 2022. "Do scientific capabilities in specific domains matter for technological diversification in European regions?," Research Policy, Elsevier, vol. 51(10).
    3. R. Boschma & Eduardo Hernández-Rodríguez & A. Morrison & C. Pietrobelli, 2021. "Do global value chains and local capabilities matter for economic complexity in EU regions?," Papers in Evolutionary Economic Geography (PEEG) 2139, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Dec 2021.
    4. Ron Boschma, 2022. "Evolutionary Economic Geography and Policy," Papers in Evolutionary Economic Geography (PEEG) 2220, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Oct 2022.
    5. Barbara MARTINI & Marco PLATANIA, 2022. "Are The Regions With More Gender Equality The More Resilient Ones? An Analysis Of The Italian Regions," Regional Science Inquiry, Hellenic Association of Regional Scientists, vol. 0(2), pages 71-94, June.
    6. repec:osf:socarx:2gw9c_v1 is not listed on IDEAS
    7. Wang, Feng & Wu, Min & Wang, Jingcao, 2023. "Can increasing economic complexity improve China's green development efficiency?," Energy Economics, Elsevier, vol. 117(C).
    8. Milene Tessarin & Ron Boschma & Deyu Li & Sergio Petralia, 2025. "Regional development traps in Europe. A study of occupational trajectories of regions," Papers in Evolutionary Economic Geography (PEEG) 2501, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Jan 2025.
    9. Ashraf, Sania & P., Jithin & Slim, Skander & Najeeb, Roshen, 2023. "Global value chains and economic complexity index: Evidence from generalized panel quantile regression," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 347-365.
    10. Fritz, Benedikt & Manduca, Robert, 2021. "The Economic Complexity of US Metropolitan Areas," SocArXiv 2gw9c, Center for Open Science.
    11. N. Cortinovis & D. Zhang & R. Boschma, 2024. "Regional diversification and intra-regional wage inequality in the Netherlands," Regional Studies, Taylor & Francis Journals, vol. 58(12), pages 2292-2306, December.
    12. DIODATO Dario, 2024. "Handbook of Economic Complexity for Policy," JRC Research Reports JRC138666, Joint Research Centre.
    13. Colozza, Federico & Boschma, Ron & Morrison, Andrea & Pietrobelli, Carlo, 2021. "The importance of global value chains and regional capabilities for the economic complexity of EU-regions," MERIT Working Papers 2021-051, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    14. Tolulope Paul Akinbobola & Oluwole Matthew Akinnagbe, 2023. "Determinants of linkages between agricultural institutions and agro-allied industries in Southwest, Nigeria," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(1), pages 228-248, January.
    15. Joanna Kudelko & Katarzyna Zmija & Dariusz Zmija, 2022. "Regional smart specialisations in the light of dynamic changes in the employment structure: the case of a region in Poland," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 17(1), pages 133-171, March.
    16. Koen Frenken & Frank Neffke & Alje van Dam, 2023. "Capabilities, institutions and regional economic development: a proposed synthesis," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 16(3), pages 405-416.
    17. Zoltán Elekes & Anna Baranowska-Rataj & Rikard Eriksson, 2023. "Regional diversification and labour market upgrading: local access to skill-related high-income jobs helps workers escaping low-wage employment," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 16(3), pages 417-430.
    18. Tom Broekel & Rune Dahl Fitjar & Silje Haus-Reve, 2021. "The roles of diversity, complexity, and relatedness in regional development – What does the occupational perspective add?," Papers in Evolutionary Economic Geography (PEEG) 2135, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Nov 2021.
    19. Focacci, Chiara Natalie & Kovac, Mitja & Spruk, Rok, 2023. "Ethnolinguistic diversity, quality of local public institutions, and firm-level innovation," International Review of Law and Economics, Elsevier, vol. 75(C).
    20. Mert Abay & Sedef Akgüngör, 2024. "Technological paths and smart specialization: analysis of regional entry and exit in Turkey," Asia-Pacific Journal of Regional Science, Springer, vol. 8(1), pages 45-84, March.
    21. Rodríguez-pose Andrés & Dijkstra Lewis, 2025. "The pursuit of competitiveness and the high stakes of territorial myopia," JRC Research Reports JRC142460, Joint Research Centre.
    22. Mariane Santos Françoso & Ron Boschma & Nicholas Vonortas, 2024. "Regional diversification in Brazil: The role of relatedness and complexity," Growth and Change, Wiley Blackwell, vol. 55(1), March.
    23. Jason Deegan & Tom Broekel & Silje Haus-Reve & Rune Dahl Fitjar, 2024. "How regions diversify into new jobs: from related industries or related occupations?," Regional Studies, Taylor & Francis Journals, vol. 58(11), pages 1965-1980, November.
    24. Julia Bachtrögler-Unger & Pierre-Alexandre Balland & Ron Boschma & Thomas Schwab, 2023. "Technological Capabilities and the Twin Transition in Europe. Opportunities for Regional Collaboration and Economic Cohesion," WIFO Studies, WIFO, number 33926503, October.

    More about this item

    Keywords

    ;

    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)

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:ags:motuwp:290391. 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: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/motuenz.html .

    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.