Regional Growth and Access to Knowledge and Dense Markets -An Empirical Study of the Performance in Sweden

Access to knowledge and local service markets can be assumed to explain regional growth performance. The supply of services and knowledge with respect to regional development are stressed in the seminal papers by for example Rivera-Batiz (1988) and Knowledge referens. In this paper we make an empirical analyse using panel data for Swedish regions. The purpose is to analyse the relationship between regional growth and access to knowledge. We also acknowledge the size of the regional economy and access to the local labour market. We estimate first a cross-section model by using OLS. Second we employ a panel data model, using time distance access to population and the share local labour force with high education as explanatory variables. In the analysis we compare the results from the different models and our own results from the Swedish economy with other studies in this field. We find that local externalities for increasing returns are very important in the Swedish economy. Our estimated models yields a high level of goodness of fit, and the results indicates significant elasticity for high education and population density in the Swedish economy with respect to performance of regional gross domestic product.