IDEAS home Printed from https://ideas.repec.org/a/eee/respol/v45y2016i4p844-856.html
   My bibliography  Save this article

Related and unrelated variety as regional drivers of enterprise productivity and innovation: A multilevel study

Author

Listed:
  • Aarstad, Jarle
  • Kvitastein, Olav A.
  • Jakobsen, Stig-Erik

Abstract

We conduct multilevel analyses of Norwegian data and find that related industrial variety is a positive regional driver of enterprise innovation. Unrelated variety is a negative regional driver of enterprise productivity. This implies that regions with high levels of related variety and low levels of unrelated variety optimize enterprise performance. We argue that regional specialization is a two-dimensional construct inversely associated with related and unrelated variety. Thus, a specialized region (low in unrelated variety) is in fact a driver of enterprise productivity. In addition, we find that population density is another regional driver of enterprise productivity.

Suggested Citation

  • Aarstad, Jarle & Kvitastein, Olav A. & Jakobsen, Stig-Erik, 2016. "Related and unrelated variety as regional drivers of enterprise productivity and innovation: A multilevel study," Research Policy, Elsevier, vol. 45(4), pages 844-856.
    • Handle: RePEc:eee:respol:v:45:y:2016:i:4:p:844-856
    DOI: 10.1016/j.respol.2016.01.013
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0048733316300063
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.respol.2016.01.013?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. Ron A. Boschma & Jan G. Lambooy, 1999. "Evolutionary economics and economic geography," Journal of Evolutionary Economics, Springer, vol. 9(4), pages 411-429.
    3. Ron Martin & Peter Sunley, 2010. "The Place of Path Dependence in an Evolutionary Perspective on the Economic Landscape," Chapters, in: Ron Boschma & Ron Martin (ed.), The Handbook of Evolutionary Economic Geography, chapter 3, Edward Elgar Publishing.
    4. Williamson, Oliver E, 1979. "Transaction-Cost Economics: The Governance of Contractural Relations," Journal of Law and Economics, University of Chicago Press, vol. 22(2), pages 233-261, October.
    5. Thomas Kemeny & Michael Storper, 2015. "Is Specialization Good for Regional Economic Development?," Regional Studies, Taylor & Francis Journals, vol. 49(6), pages 1003-1018, June.
    6. Michael Porter, 2003. "The Economic Performance of Regions," Regional Studies, Taylor & Francis Journals, vol. 37(6-7), pages 549-578.
    7. 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.
    8. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    9. Bernd Ebersberger & Sverre J. Herstad, 2012. "Go abroad or have strangers visit? On organizational search spaces and local linkages," Journal of Economic Geography, Oxford University Press, vol. 12(1), pages 273-295, January.
    10. Kemeny, Thomas & Storper, Michael, 2012. "Specialization and regional economic development," LSE Research Online Documents on Economics 58538, London School of Economics and Political Science, LSE Library.
    11. Ron Boschma & Simona Iammarino, 2009. "Related Variety, Trade Linkages, and Regional Growth in Italy," Economic Geography, Clark University, vol. 85(3), pages 289-311, July.
    12. Beaudry, Catherine & Schiffauerova, Andrea, 2009. "Who's right, Marshall or Jacobs? The localization versus urbanization debate," Research Policy, Elsevier, vol. 38(2), pages 318-337, March.
    13. Dieter F. Kogler, 2015. "Editorial: Evolutionary Economic Geography - Theoretical and Empirical Progress," Regional Studies, Taylor & Francis Journals, vol. 49(5), pages 705-711, May.
    14. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    15. Glaeser, Edward L & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1992. "Growth in Cities," Journal of Political Economy, University of Chicago Press, vol. 100(6), pages 1126-1152, December.
      • Edward L. Glaeser & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1991. "Growth in Cities," NBER Working Papers 3787, National Bureau of Economic Research, Inc.
      • Glaeser, Edward Ludwig & Kallal, Hedi D. & Scheinkman, Jose A. & Shleifer, Andrei, 1992. "Growth in Cities," Scholarly Articles 3451309, Harvard University Department of Economics.
    16. Ola Henfridsson & Youngjin Yoo, 2014. "The Liminality of Trajectory Shifts in Institutional Entrepreneurship," Organization Science, INFORMS, vol. 25(3), pages 932-950, June.
    17. 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.
    18. Peter Maskell, 2001. "The Firm in Economic Geography," Economic Geography, Taylor & Francis Journals, vol. 77(4), pages 329-344, October.
    19. Michael E. Porter, 2000. "Location, Competition, and Economic Development: Local Clusters in a Global Economy," Economic Development Quarterly, , vol. 14(1), pages 15-34, February.
    20. Sam Tavassoli & Nunzia Carbonara, 2014. "The role of knowledge variety and intensity for regional innovation," Small Business Economics, Springer, vol. 43(2), pages 493-509, August.
    21. M. Hartog & R. Boschma & M. Sotarauta, 2012. "The Impact of Related Variety on Regional Employment Growth in Finland 1993--2006: High-Tech versus Medium/Low-Tech," Industry and Innovation, Taylor & Francis Journals, vol. 19(6), pages 459-476, August.
    22. Ron Boschma & Ron Martin, 2007. "Editorial: Constructing an evolutionary economic geography," Journal of Economic Geography, Oxford University Press, vol. 7(5), pages 537-548, September.
    23. K. J. Arrow, 1971. "The Economic Implications of Learning by Doing," Palgrave Macmillan Books, in: F. H. Hahn (ed.), Readings in the Theory of Growth, chapter 11, pages 131-149, Palgrave Macmillan.
    24. Nooteboom, Bart & Van Haverbeke, Wim & Duysters, Geert & Gilsing, Victor & van den Oord, Ad, 2007. "Optimal cognitive distance and absorptive capacity," Research Policy, Elsevier, vol. 36(7), pages 1016-1034, September.
    25. Robert E. Hall & Charles I. Jones, 1999. "Why do Some Countries Produce So Much More Output Per Worker than Others?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(1), pages 83-116.
    26. Ron Martin & Peter Sunley, 1998. "Slow Convergence? The New Endogenous Growth Theory and Regional Development," Economic Geography, Taylor & Francis Journals, vol. 74(3), pages 201-227, July.
    27. Roberto Antonietti & Giulio Cainelli, 2011. "The role of spatial agglomeration in a structural model of innovation, productivity and export: a firm-level analysis," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 46(3), pages 577-600, June.
    28. Henderson, J. Vernon, 2003. "Marshall's scale economies," Journal of Urban Economics, Elsevier, vol. 53(1), pages 1-28, January.
    29. Jeremy Howells & John Bessant, 2012. "Introduction: Innovation and economic geography: a review and analysis," Journal of Economic Geography, Oxford University Press, vol. 12(5), pages 929-942, September.
    30. Meric Gertler, 2010. "Rules of the Game: The Place of Institutions in Regional Economic Change," Regional Studies, Taylor & Francis Journals, vol. 44(1), pages 1-15.
    31. Olivier Bertrand & Michael J. Mol, 2013. "The antecedents and innovation effects of domestic and offshore R&D outsourcing: The contingent impact of cognitive distance and absorptive capacity," Strategic Management Journal, Wiley Blackwell, vol. 34(6), pages 751-760, June.
    32. Ron Boschma & Ron Martin (ed.), 2010. "The Handbook of Evolutionary Economic Geography," Books, Edward Elgar Publishing, number 12864.
    33. Edward J. Feser, 2002. "Tracing the Sources of Local External Economies," Urban Studies, Urban Studies Journal Limited, vol. 39(13), pages 2485-2506, December.
    34. Gerald A. Carlino, 2001. "Knowledge spillovers: cities' role in the new economy," Business Review, Federal Reserve Bank of Philadelphia, issue Q4, pages 17-26.
    35. Arundel, Anthony, 2001. "The relative effectiveness of patents and secrecy for appropriation," Research Policy, Elsevier, vol. 30(4), pages 611-624, April.
    36. Ron Martin & Peter Sunley, 2006. "Path dependence and regional economic evolution," Journal of Economic Geography, Oxford University Press, vol. 6(4), pages 395-437, August.
    37. Ron Martin, 2010. "Roepke Lecture in Economic Geography—Rethinking Regional Path Dependence: Beyond Lock-in to Evolution," Economic Geography, Taylor & Francis Journals, vol. 86(1), pages 1-27, January.
    38. Hall, Bronwyn H & Ziedonis, Rosemarie Ham, 2001. "The Patent Paradox Revisited: An Empirical Study of Patenting in the U.S. Semiconductor Industry, 1979-1995," RAND Journal of Economics, The RAND Corporation, vol. 32(1), pages 101-128, Spring.
    39. Sofia Wixe, 2015. "The Impact of Spatial Externalities: Skills, Education and Plant Productivity," Regional Studies, Taylor & Francis Journals, vol. 49(12), pages 2053-2069, December.
    40. Koen Frenken & Frank Van Oort & Thijs Verburg, 2007. "Related Variety, Unrelated Variety and Regional Economic Growth," Regional Studies, Taylor & Francis Journals, vol. 41(5), pages 685-697.
    41. Donald W. K. Andrews, 1999. "Estimation When a Parameter Is on a Boundary," Econometrica, Econometric Society, vol. 67(6), pages 1341-1384, November.
    42. Ron Boschma & Asier Minondo & Mikel Navarro, 2012. "Related variety and regional growth in Spain," Papers in Regional Science, Wiley Blackwell, vol. 91(2), pages 241-256, June.
    43. John Baldwin & Desmond Beckstead & W. Mark Brown & David Rigby, 2008. "Agglomeration and the Geography of Localization Economies in Canada," Regional Studies, Taylor & Francis Journals, vol. 42(1), pages 117-132.
    44. Pinar Falcioglu, 2011. "Location and Determinants of Productivity: The Case of the Manufacturing Industry in Turkey," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 47(0), pages 86-96, November.
    45. Ron Boschma, 2005. "Proximity and Innovation: A Critical Assessment," Regional Studies, Taylor & Francis Journals, vol. 39(1), pages 61-74.
    46. Rikard Eriksson & Urban Lindgren, 2009. "Localized mobility clusters: impacts of labour market externalities on firm performance," Journal of Economic Geography, Oxford University Press, vol. 9(1), pages 33-53, January.
    47. Roberto Antonietti & Giulio Cainelli, 2012. "KIBS and the City: GIS Evidence from Milan," Economia politica, Società editrice il Mulino, issue 3, pages 305-318.
    48. Robert Hassink & Claudia Klaerding & Pedro Marques, 2014. "Advancing Evolutionary Economic Geography by Engaged Pluralism," Regional Studies, Taylor & Francis Journals, vol. 48(7), pages 1295-1307, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ron Boschma & Koen Frenken, 2011. "The emerging empirics of evolutionary economic geography," Journal of Economic Geography, Oxford University Press, vol. 11(2), pages 295-307, March.
    2. 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.
    3. Liang, Jiaochen & Goetz, Stephan J., 2018. "Technology intensity and agglomeration economies," Research Policy, Elsevier, vol. 47(10), pages 1990-1995.
    4. 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.
    5. Matthias Firgo & Peter Mayerhofer, 2015. "Wissens-Spillovers und regionale Entwicklung - welche strukturpolitische Ausrichtung optimiert des Wachstum?," Working Paper Reihe der AK Wien - Materialien zu Wirtschaft und Gesellschaft 144, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik.
    6. Ron Boschma & Ron Martin, 2010. "The Aims and Scope of Evolutionary Economic Geography," Chapters, in: Ron Boschma & Ron Martin (ed.), The Handbook of Evolutionary Economic Geography, chapter 1, Edward Elgar Publishing.
    7. Wallin, Tina, 2017. "An empirical study of firms’ absorptive capacity and export diversification," Working Paper Series in Economics and Institutions of Innovation 452, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    8. Matthias Firgo & Peter Mayerhofer, 2015. "Wissensintensive Unternehmensdienste, Wissens-Spillovers und regionales Wachstum. Teilprojekt 1: Wissens-Spillovers und regionale Entwicklung – Welche strukturpolitische Ausrichtung optimiert das Wach," WIFO Studies, WIFO, number 58342.
    9. Lars Coenen & Bjørn Asheim & Markus M Bugge & Sverre J Herstad, 2017. "Advancing regional innovation systems: What does evolutionary economic geography bring to the policy table?," Environment and Planning C, , vol. 35(4), pages 600-620, June.
    10. 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.
    11. Thomas Ejdemo & Daniel Örtqvist, 2021. "Exploring a leading and lagging regions dichotomy: does entrepreneurship and diversity explain it?," Journal of Innovation and Entrepreneurship, Springer, vol. 10(1), pages 1-26, December.
    12. Jeroen Content & Koen Frenken, 2016. "Related variety and economic development: a literature review," European Planning Studies, Taylor & Francis Journals, vol. 24(12), pages 2097-2112, December.
    13. repec:elg:eechap:14395_12 is not listed on IDEAS
    14. Hervas Oliver,Jose Luis & Gonzalez,Gregorio & Caja,Pedro, 2014. "Clusters and industrial districts: where is the literature going? Identifying emerging sub-fields of research," INGENIO (CSIC-UPV) Working Paper Series 201409, INGENIO (CSIC-UPV).
    15. 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.
    16. Hundt, Christian & Holtermann, Linus & Steeger, Jonas & Bersch, Johannes, 2019. "Cluster externalities, firm capabilities, and the recessionary shock: How the macro-to-micro-transition shapes firm performance during stable times and times of crisis," ZEW Discussion Papers 19-008, ZEW - Leibniz Centre for European Economic Research.
    17. Junsong Wang & Martha Prevezer, 2015. "Related variety in Chinese cities: local and Foreign Direct Investment related variety and impacts on urban growth," Working Papers 59, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.
    18. Park, Jeong-Il, 2020. "Industrial diversity in building units and factors associated with diversity: A case study of the Seoul Metropolitan Area," Research Policy, Elsevier, vol. 49(5).
    19. Ejdemo, Thomas & Örtqvist, Daniel, 2020. "Related variety as a driver of regional innovation and entrepreneurship: A moderated and mediated model with non-linear effects," Research Policy, Elsevier, vol. 49(7).
    20. Sofia Wixe, 2015. "The Impact of Spatial Externalities: Skills, Education and Plant Productivity," Regional Studies, Taylor & Francis Journals, vol. 49(12), pages 2053-2069, December.
    21. 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.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:respol:v:45:y:2016:i:4:p:844-856. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/respol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.