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Variety and Regional Economic Growth in the Netherlands

60 Pages Posted: 28 Dec 2005  

Koen Frenken

University of Utrecht - Urban and Regional Research Centre Utrecht (URU)

Frank G. van Oort

University of Utrecht

Thijs Verburg

University of Utrecht

Ron A. Boschma

Utrecht University - Faculty of Geographical Sciences

Date Written: January 2005

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.

Keywords: variety, Jacobs externalities, regional growth

Suggested Citation

Frenken, Koen and van Oort, Frank G. and Verburg, Thijs and Boschma, Ron A., Variety and Regional Economic Growth in the Netherlands (January 2005). Available at SSRN: https://ssrn.com/abstract=871804 or http://dx.doi.org/10.2139/ssrn.871804

Koen Frenken (Contact Author)

University of Utrecht - Urban and Regional Research Centre Utrecht (URU) ( email )

Vredenburg 138
Utrecht, 3511 BG
Netherlands

HOME PAGE: http://econ.geo.uu.nl/frenken/frenken.html

Frank Van Oort

University of Utrecht ( email )

Vredenburg 138
NL-3508 TC Utrecht, 3511 BG
Netherlands

Thijs Verburg

University of Utrecht ( email )

Vredenburg 138
NL-3508 TC Utrecht, 3511 BG
Netherlands

Ron A. Boschma

Utrecht University - Faculty of Geographical Sciences ( email )

Postbus 80.115
3508 TC Utrecht
Netherlands
+31 30 2532896 (Phone)
+31 30 2532037 (Fax)

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