Related Variety, Unrelated Variety and Regional Economic Growth

Related Variety, Unrelated Variety and Regional Economic Growth

27 Aug 2010 | Koen Frenken, Frank Van Oort & Thijs Verburg
The article by Koen Frenken, Frank Van Oort, and Thijs Verburg explores the relationship between variety and regional economic growth, distinguishing between related variety (within sectors) and unrelated variety (between sectors). Related variety is associated with Jacobs externalities, which enhance employment growth, while unrelated variety dampens unemployment growth. The authors introduce a methodology based on entropy measures to compute these types of variety. Using data from the Netherlands at the NUTS 3 level for the period 1996-2002, they find that related variety positively impacts employment growth, while unrelated variety reduces unemployment growth. Productivity growth is explained by traditional determinants such as investments and R&D expenditures. The study suggests that regional policies should focus on fostering related variety to stimulate job creation and economic development.The article by Koen Frenken, Frank Van Oort, and Thijs Verburg explores the relationship between variety and regional economic growth, distinguishing between related variety (within sectors) and unrelated variety (between sectors). Related variety is associated with Jacobs externalities, which enhance employment growth, while unrelated variety dampens unemployment growth. The authors introduce a methodology based on entropy measures to compute these types of variety. Using data from the Netherlands at the NUTS 3 level for the period 1996-2002, they find that related variety positively impacts employment growth, while unrelated variety reduces unemployment growth. Productivity growth is explained by traditional determinants such as investments and R&D expenditures. The study suggests that regional policies should focus on fostering related variety to stimulate job creation and economic development.
Reach us at info@study.space
[slides] Related Variety%2C Unrelated Variety and Regional Economic Growth | StudySpace