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Agents of structural change. The role of firms and entrepreneurs in regional diversification

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  • Frank Neffke

    ()

  • Matté Hartog

    ()

  • Ron Boschma

    ()

  • Martin Henning

    ()

Abstract

Who introduces structural change in regional economies: Entrepreneurs or existing firms? And do local or non-local firms and entrepreneurs create most novelty in a region? Using matched employer-employee data for the whole Swedish workforce, we determine how unrelated and therefore how novel the activities of different establishments are to a region’s industry mix. Up- and downsizing establishments cause large shifts in the local industry structure, but these shifts only occasionally require an expansion of local capabilities because the new activities are often related to existing local activities. Indeed, these incumbents tend to align their production with the local economy, deepening the region’s specialization. In contrast, structural change mostly originates via new establishments, especially those with non-local roots. Moreover, although entrepreneurs start businesses more often in activities unrelated to the existing regional economy, new establishments founded by existing firms survive in such activities more often, inducing longer-lasting changes in the region.

Suggested Citation

  • Frank Neffke & Matté Hartog & Ron Boschma & Martin Henning, 2014. "Agents of structural change. The role of firms and entrepreneurs in regional diversification," Papers in Evolutionary Economic Geography (PEEG) 1410, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Apr 2014.
  • Handle: RePEc:egu:wpaper:1410
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    Cited by:

    1. Ron Boschma, 2015. "Towards an Evolutionary Perspective on Regional Resilience," Regional Studies, Taylor & Francis Journals, vol. 49(5), pages 733-751, May.
    2. Trippl , Michaela & Grillitsch , Markus & Isaksen , Arne, 2015. "External “energy” for regional industrial change: attraction and absorption of non-local knowledge for new path development," Papers in Innovation Studies 2015/47, Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy.
    3. Nicola Cortinovis & Jing Xiao & Ron Boschma & Frank G van Oort, 2017. "Quality of government and social capital as drivers of regional diversification in Europe," Journal of Economic Geography, Oxford University Press, vol. 17(6), pages 1179-1208.
    4. repec:oup:indcch:v:27:y:2018:i:4:p:763-785. is not listed on IDEAS
    5. Ron Boschma & Koen Frenken, 2015. "Evolutionary Economic Geography," Papers in Evolutionary Economic Geography (PEEG) 1518, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised May 2015.
    6. Nicola D Coniglio & Raffaele Lagravinese & Davide Vurchio & Massimo Armenise, 2018. "The pattern of structural change: testing the product space framework," Industrial and Corporate Change, Oxford University Press, vol. 27(4), pages 763-785.
    7. Binz, Christian & Diaz Anadon, Laura, 2016. "Transplanting clean-tech paths from elsewhere: The emergence of the Chinese solar PV industry," Papers in Innovation Studies 2016/29, Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy.
    8. Ron Boschma, 2017. "Relatedness as driver behind regional diversification: a research agenda," Papers in Evolutionary Economic Geography (PEEG) 1702, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Jan 2017.
    9. Ron Boschma, Lars Coenen, Koen Frenken, Bernhard Truffer & Lars Coenen & Koen Frenken & Bernhard Truffer, 2016. "Towards a theory of regional diversification," Papers in Evolutionary Economic Geography (PEEG) 1617, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Jul 2016.
    10. repec:oup:cjrecs:v:11:y:2018:i:2:p:275-295. is not listed on IDEAS
    11. Raphaël Suire, 2016. "Place, platform, and knowledge co-production dynamics: Evidence from makers and FabLab," Papers in Evolutionary Economic Geography (PEEG) 1623, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Aug 2016.
    12. Jing Xiao & Ron Boschma & Martin Andersson, 2018. "Industrial Diversification in Europe: The Differentiated Role of Relatedness," Economic Geography, Taylor & Francis Journals, vol. 94(5), pages 514-549, October.
    13. Anne Otto & Rikard Eriksson & Martin Henning, 2015. "Industrial and geographical mobility of workers exiting the Swedish and West German shipbuilding industry 1970-2000," ERSA conference papers ersa15p958, European Regional Science Association.
    14. Luís Carvalho & Mário Vale, 2018. "Biotech by bricolage? Agency, institutional relatedness and new path development in peripheral regions," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 11(2), pages 275-295.

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    Keywords

    Structural change; entrepreneurship; diversification; relatedness; regions; resource-based view;

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