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Variety and regional economic growth in the Netherlands

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  • Koen Frenken

    ()

  • Frank G. van Oort

    ()

  • Thijs Verburg
  • Ron A. Boschma

    ()

Abstract

In economic theory, one can distinguish between variety as a source of regional knowledge spillovers, called Jacobs externalities, and variety as a portfolio protecting a region from external shocks. We argue that Jacobs externalities are best measured by related variety (within sectors), while the portfolio argument is better captured by unrelated variety (between sectors). We introduce a methodology based on entropy measures to compute related variety and unrelated variety. Using data at the COROP level for the period 1996-2002, we find that Jacobs externalities enhance employment growth, while unrelated variety dampens unemployment growth. Productivity growth, by contrast, can be explained by traditional determinants including investments and R&D expenditures. Implications for regional policy in The Netherlands follow.

Suggested Citation

  • Koen Frenken & Frank G. van Oort & Thijs Verburg & Ron A. Boschma, 2004. "Variety and regional economic growth in the Netherlands," Papers in Evolutionary Economic Geography (PEEG) 0502, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Dec 2004.
  • Handle: RePEc:egu:wpaper:0502
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    Cited by:

    1. Backman, Mikaela & Kohlhase, Janet, 2013. "The Influence of Diversity on the Formation, Survival and Growth of New Firms," Working Paper Series in Economics and Institutions of Innovation 337, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    2. Salazar, Xavier & Atienza, Miguel, 2010. "Las empresas en Santa Cruz, ¿continúan en una estructura monocéntrica?," Revista Latinoamericana de Desarrollo Economico, Instituto de Investigaciones Socio-Económicas (IISEC), Universidad Católica Boliviana, issue 13, pages 59-90.
    3. Giulio Cainelli & Roberto Ganau & Donato Iacobucci, 2016. "Do Geographic Concentration and Vertically Related Variety Foster Firm Productivity? Micro-Evidence from Italy," Growth and Change, Wiley Blackwell, vol. 47(2), pages 197-217, June.
    4. Steven Poelhekke, 2006. "Do Amenities and Diversity Encourage City Growth? A Link Through Skilled Labor," Economics Working Papers ECO2006/10, European University Institute.
    5. Lundquist, Karl-Johan & Olander, Lars-Olof & Svensson Henning, Martin, 2008. "Creative destruction and economic welfare in Swedish regions: spatial dimensions of structural change, growth and employment," SRE-Discussion Papers 634, WU Vienna University of Economics and Business.
    6. Guillaume Daudin & Jean-Luc Gaffard & Sandrine Levasseur & Catherine Mathieu & Georges Pujals & Michel Quéré & Henri Sterdyniak, 2005. "Competition from emerging countries, international relocation and their impacts on employment," Working Papers hal-01065588, HAL.
    7. Alessandro Rosiello & Luigi Orsenigo, 2008. "A Critical Assessment of Regional Innovation Policy in Pharmaceutical Biotechnology," European Planning Studies, Taylor & Francis Journals, vol. 16(3), pages 337-357, January.
    8. Giulio Cainelli & Eleonora Di Maria & Roberto Ganau, 2011. "Agglomeration, related-variety and internationalisation. Does a relationship exist?," Openloc Working Papers 1114, Public policies and local development.
    9. repec:eee:regeco:v:68:y:2018:i:c:p:260-267 is not listed on IDEAS
    10. Mikaela Backman & Maureen Kilkenny, 2014. "Diversified experience, benefits to the individual and the firm," ERSA conference papers ersa14p18, European Regional Science Association.
    11. R. Paci & S. Usai, 2006. "Agglomeration economies and growth-The case of Italian local labour systems, 1991-2001," Working Paper CRENoS 200612, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    12. Karl-Johan Lundquist & Lars-Olof Olander & Martin Svensson Henning, 2008. "Producer services: growth and roles in long-term economic development," The Service Industries Journal, Taylor & Francis Journals, vol. 28(4), pages 463-477, May.
    13. Paul Bishop, 2006. "Spatial spillovers and employment growth in the service sector," The Service Industries Journal, Taylor & Francis Journals, vol. 29(6), pages 791-803, July.
    14. Sierdjan Koster, 2011. "Individual foundings and organizational foundings: their effect on employment growth in The Netherlands," Small Business Economics, Springer, vol. 36(4), pages 485-501, May.
    15. Karl-Johan Lundquist & Lars-Olof Olander & Martin Svensson Henning, 2008. "Creative destruction and economic welfare in Swedish regions: Spatial dimensions of structural change, growth and employment," SRE-Disc sre-disc-2008_03, Institute for Multilevel Governance and Development, Department of Socioeconomics, Vienna University of Economics and Business.
    16. Eva Berggren & Åsa Lindholm Dahlstrand, 2009. "Creating an Entrepreneurial Region: Two Waves of Academic Spin-offs from Halmstad University," European Planning Studies, Taylor & Francis Journals, vol. 17(8), pages 1171-1189, February.
    17. repec:taf:regstd:v:51:y:2017:i:6:p:958-971 is not listed on IDEAS
    18. Jean-Luc Gaffard & Michel Quéré, 2005. "Délocalisations : simple affaire de concurrence ou problème de politique économique ?," Revue de l'OFCE, Presses de Sciences-Po, vol. 94(3), pages 193-210.
    19. Luciana Lazzeretti & Francesco Capone & Tommaso Cinti, 2009. "The Regional Development Platform and “Related Variety”: Some Evidence from Art and Food in Tuscany," European Planning Studies, Taylor & Francis Journals, vol. 18(1), pages 27-45, July.
    20. Helinä Melkas & Tuomo Uotila & Tomi Tura, 2016. "Policies of related variety in practice: the case Innovation Session Method," European Planning Studies, Taylor & Francis Journals, vol. 24(3), pages 489-510, March.
    21. Joeri Gorter & Suzanne Kok, 2009. "Agglomeration economies in the Netherlands," CPB Discussion Paper 124, CPB Netherlands Bureau for Economic Policy Analysis.
    22. Koen Frenken & Frank Van Oort & Thijs Verburg, 2007. "Related Variety, Unrelated Variety and Regional Economic Growth," Regional Studies, Taylor & Francis Journals, vol. 41(5), pages 685-697.
    23. Belmartino, Andrea, 2016. "Diversidad industrial en las provincias argentinas y factores económicos asociados (1996-2012)," Nülan. Deposited Documents 2604, Universidad Nacional de Mar del Plata, Facultad de Ciencias Económicas y Sociales, Centro de Documentación.
    24. Jürgen Essletzbichler, 2005. "Diversity, stability and regional growth in the U.S. (1975-2002)," Papers in Evolutionary Economic Geography (PEEG) 0513, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Sep 2005.
    25. Amanda Mackloet, 2006. "Locational Dynamics in an Era of Global Economic Change: Is the Port of Rotterdam Up to the Challenge?," ERSA conference papers ersa06p337, European Regional Science Association.

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    Keywords

    evolutionary economic geography; new economic geography; economic variety;

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