Related Variety, Unrelated Variety and Regional Functions: Identifying Sources of Regional Employment Growth in Germany from 2003 to 2008

Matthias Brachert (), Alexander Kubis and Mirko Titze

No 15/2011, IWH Discussion Papers from Halle Institute for Economic Research (IWH)

Abstract: This article analyses how regional employment growth in Germany is affected by related variety, unrelated variety and the functions a region performs in the production process. Following the related variety literature, we argue that regions benefit from the existence of related activities that facilitate economic development. However, we argue that the sole reliance of related variety on standard industrial classifications remains debatable. Hence, we offer estimations for establishing that conceptual progress can indeed be made when a focus for analysis goes beyond solely considering industries. We develop an industry-function based approach of related and unrelated variety. Our findings suggest that related variety only in combination with a high functional specialization of the region facilitates regional growth in Germany. Additionally, also unrelated variety per se fails to wield influences affecting development of regions. It is rather unrelated, but functionally proximate variety in the groups 'White Collar' and 'Blue Collar Workers' positively affects regional employment growth.

Keywords: related variety; unrelated variety; regional functions; functional specialization; Verbundene Vielfalt; unverbundene Vielfalt; funktionale Spezialisierung (search for similar items in EconPapers)
JEL-codes: D62 O18 R11 R12 (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:iwhdps:iwh-15-11

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