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Related variety, trade variety and regional growth in Italy

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  • Ron Boschma
  • Simona Iammarino

Abstract

This paper makes an attempt to estimate the impact of regional variety and trade linkages on regional economic growth by means of export and import data by Italian province (NUTS 3) and sector (3-digit) for the period 1995-2003. Our results show strong evidence of related variety contributing to regional economic growth, no matter how growth is defined. Thus, Italian regions well endowed with sectors that are complementary in terms of competences (i.e. having related variety) perform better. The paper also assesses the effects of the breadth and relatedness of international trade linkages on regional growth, as it may bring new and related variety in the region. Our analysis demonstrates that regional growth is not affected by being well connected to the outside world per se, or having a high variety of knowledge flowing into the region. When the extra-regional knowledge originated from sectors the region is already specialised in, it did not positively impact on regional economic growth either. We found, however, some evidence of related extra-regional knowledge sparking off inter-sectoral learning across regions. With respect to employment growth, we could demonstrate that a region benefits from extra-regional knowledge when it originates from sectors that are related, but not similar to the sectors present in the region. Apparently, when the cognitive proximity between the extra-regional knowledge and the knowledge base of the region is neither too small nor too large, real learning opportunities are present, and the external knowledge contributes to regional employment growth.

Suggested Citation

  • Ron Boschma & Simona Iammarino, 2008. "Related variety, trade variety and regional growth in Italy," Papers in Evolutionary Economic Geography (PEEG) 0802, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Jan 2008.
    • Handle: RePEc:egu:wpaper:0802
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    File URL: http://econ.geo.uu.nl/peeg/peeg0802.pdf
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    2. Malhotra, Abhishek & Schmidt, Tobias S. & Huenteler, Joern, 2019. "The role of inter-sectoral learning in knowledge development and diffusion: Case studies on three clean energy technologies," Technological Forecasting and Social Change, Elsevier, vol. 146(C), pages 464-487.
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    5. Moodysson , Jerker & Sack , Lionel, 2013. "Authenticity renewal – institutions, innovation systems, and Cognac evolution (when the rules of the game don’t change)," Papers in Innovation Studies 2013/36, Lund University, CIRCLE - Centre for Innovation Research.

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    More about this item

    Keywords

    related variety; agglomeration economies; trade linkages; regional growth; Italy;
    All these 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)
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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