Co-worker networks and productivity growth in regions

This paper provides a new empirical perspective for analysing the role of social networks for regional economic growth by constructing large-scale networks from employee-employee co-occurrences in plants in the entire Swedish economy 1990-2008. We calculate the probability of employee-employee ties at plant level based on homophily-biased random network assumptions and trace the most probable relations of every employee over the full period. We argue that these personal acquaintances are important for local learning opportunities and consequently for regional growth. Indeed, the paper provides the first systematic evidence for a central claim in economic geography: social network density has positive effect on regional growth defined as productivity growth. Interestingly, the most robust effect of density on growth was found in a segment of the co-worker network in which plants have never been linked by labour mobility previously.