Variety and regional economic growth in the Netherlands : final report to the Ministery of Economic Affairs

K. Frenken, F.G. Oort, van, T. Verburg, R.A. Boschma

Research output: Book/ReportReportAcademic

Abstract

In economic theory, one can distinguish between variety as a source of regional knowledge spillovers, called Jacobs externalities, and variety as a portfolio protecting a region from external shocks. We argue that Jacobs externalities are best measured by related variety (within sectors), while the portfolio argument is better captured by unrelated variety (between sectors). We introduce a methodology based on entropy measures to compute related variety and unrelated variety. Using data at the COROP level for the period 1996-2002, we find that Jacobs externalities enhance employment growth, while unrelated variety dampens unemployment growth. Productivity growth, by contrast, can be explained by traditional determinants including investments and R&D expenditures. Implications for regional policy in The Netherlands follow.
Original languageEnglish
Place of PublicationThe Hague
PublisherMinistry of Economic Affairs
Commissioning bodyMinistry of economic affairs
Number of pages58
Publication statusPublished - 2004

Publication series

NameResearch Series

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