Regional Interaction & Economic Diversity - exploring the role of geographically overlapping markets for a municipality’s diversity in retail and durables

Martin Andersson and Johan Klaesson

No 49, Working Paper Series in Economics and Institutions of Innovation from Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies

Abstract: This paper is devoted to the study of municipal diversity in retail and durables. Specifically, it analyzes how a region’s relative market-accessibility in a system (or hierarchy) of municipalities affects the extent of diversity. In the theoretical part of the paper a simple modelmunicipal diversity in retail and durables is introduced, which incorporates the municipality’s position in a system of municipalities. Using this model as a point of reference, the paper explores the relationship between market-size and diversity in Swedish regions from 1993 to 2001 by means of a panel data approach. Three types of market-sizes are considered: (i) intramunicipal,(ii) intra-regional and (iii) extra-regional. It is shown that the relationships between diversity and the three types of market-sizes differ between different types of municipalities in the hierarchy, implying that such a classification is warranted. One particular finding that corresponds to the agglomeration shadow-effects usually discussed in NEG-theories is that large municipalities gain from proximity to surrounding municipalities while small municipalities do not.

Keywords: diversity; accessibility; retail; durables; market potential; market size; hierarch systems; management; technological change; trade unions. (search for similar items in EconPapers)
JEL-codes: L10 O10 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2006-03-28
New Economics Papers: this item is included in nep-geo and nep-ure
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:hhs:cesisp:0049

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