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Related Variety, Unrelated Variety and Regional Functions: Identifying Sources of Regional Employment Growth in Germany from 2003 to 2008

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  • Brachert, Matthias
  • Kubis, Alexander
  • Titze, Mirko

Abstract

This article analyses how regional employment growth in Germany is affected by related variety, unrelated variety and the functions a region performs in the production process. Following the related variety literature, we argue that regions benefit from the existence of related activities that facilitate economic development. However, we argue that the sole reliance of related variety on standard industrial classifications remains debatable. Hence, we offer estimations for establishing that conceptual progress can indeed be made when a focus for analysis goes beyond solely considering industries. We develop an industry-function based approach of related and unrelated variety. Our findings suggest that related variety only in combination with a high functional specialization of the region facilitates regional growth in Germany. Additionally, also unrelated variety per se fails to wield influences affecting development of regions. It is rather unrelated, but functionally proximate variety in the groups 'White Collar' and 'Blue Collar Workers' positively affects regional employment growth.

Suggested Citation

  • Brachert, Matthias & Kubis, Alexander & Titze, Mirko, 2011. "Related Variety, Unrelated Variety and Regional Functions: Identifying Sources of Regional Employment Growth in Germany from 2003 to 2008," IWH Discussion Papers 15/2011, Halle Institute for Economic Research (IWH).
    • Handle: RePEc:zbw:iwhdps:iwh-15-11
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    1. Frank Neffke & Martin Henning & Ron Boschma, 2011. "How Do Regions Diversify over Time? Industry Relatedness and the Development of New Growth Paths in Regions," Economic Geography, Taylor & Francis Journals, vol. 87(3), pages 237-265, July.
    2. Koen Frenken & Ron A. Boschma, 2007. "A theoretical framework for evolutionary economic geography: industrial dynamics and urban growth as a branching process," Journal of Economic Geography, Oxford University Press, vol. 7(5), pages 635-649, September.
    3. Duranton, Gilles & Puga, Diego, 2005. "From sectoral to functional urban specialisation," Journal of Urban Economics, Elsevier, vol. 57(2), pages 343-370, March.
    4. Henderson, Vernon & Kuncoro, Ari & Turner, Matt, 1995. "Industrial Development in Cities," Journal of Political Economy, University of Chicago Press, vol. 103(5), pages 1067-1090, October.
    5. Michaela Trippl, 2010. "Developing Cross‐Border Regional Innovation Systems: Key Factors And Challenges," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 101(2), pages 150-160, April.
    6. Bode, Eckhardt, 1998. "Lokale Wissensdiffusion und regionale Divergenz in Deutschland," Open Access Publications from Kiel Institute for the World Economy 1038, Kiel Institute for the World Economy (IfW).
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    Citations

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    Cited by:

    1. Nicola Cortinovis & Frank Oort, 2015. "Variety, economic growth and knowledge intensity of European regions: a spatial panel analysis," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 55(1), pages 7-32, October.
    2. Ron Boschma & Asier Minondo & Mikel Navarro, 2013. "The Emergence of New Industries at the Regional Level in S pain: A Proximity Approach Based on Product Relatedness," Economic Geography, Taylor & Francis Journals, vol. 89(1), pages 29-51, January.
    3. Frank Van Oort, 2013. "Agglomeration Economics Beyond the Specialisation-Diversity Controversy," Papers in Evolutionary Economic Geography (PEEG) 1313, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Aug 2013.
    4. Giulio Cainelli & Roberto Ganau & Marco Modica, 2019. "Does related variety affect regional resilience? New evidence from Italy," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 62(3), pages 657-680, June.
    5. Michael Fritsch & Sandra Kublina, 2018. "Related variety, unrelated variety and regional growth: the role of absorptive capacity and entrepreneurship," Regional Studies, Taylor & Francis Journals, vol. 52(10), pages 1360-1371, October.
    6. Carolina Castaldi & Koen Frenken & Bart Los, 2015. "Related Variety, Unrelated Variety and Technological Breakthroughs: An analysis of US State-Level Patenting," Regional Studies, Taylor & Francis Journals, vol. 49(5), pages 767-781, May.
    7. Sofia Wixe & Martin Andersson, 2017. "Which types of relatedness matter in regional growth? Industry, occupation and education," Regional Studies, Taylor & Francis Journals, vol. 51(4), pages 523-536, April.
    8. Apa, Roberta & De Noni, Ivan & Orsi, Luigi & Sedita, Silvia Rita, 2018. "Knowledge space oddity: How to increase the intensity and relevance of the technological progress of European regions," Research Policy, Elsevier, vol. 47(9), pages 1700-1712.
    9. repec:elg:eechap:14395_12 is not listed on IDEAS
    10. Luciana Lazzeretti & Niccolò Innocenti & Francesco Capone, 2015. "Does Related variety matter for Creative Industries?," Papers in Evolutionary Economic Geography (PEEG) 1510, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised May 2015.
    11. Wixe, Sofia, 2014. "Firm Knowledge, Neighborhood Diversity and Innovation," Working Paper Series in Economics and Institutions of Innovation 360, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.

    More about this item

    Keywords

    related variety; unrelated variety; regional functions; functional specialization; Verbundene Vielfalt; unverbundene Vielfalt; funktionale Spezialisierung;

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • 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)

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