Co-worker networks, labour mobility and productivity growth in regions

Balázs Lengyel and Rikard H. Eriksson

Journal of Economic Geography, 2017, vol. 17, issue 3, 635-660

Abstract: The mobility of workers is an important source of regional dynamics, but the effect of mobility on regional productivity growth is not straightforward, as some firms tend to win while others lose from mobility. In the present paper, we argue that the co-worker networks across plants that are established by labour moves are important for both local learning opportunities and job matching quality and should hence facilitate regional growth. We therefore propose a new homophily-biased perspective on co-worker network creation and show that it suits geographical analyses better than random networks do. Moreover, panel vector autoregression models provide systematic evidence that an increase in co-worker network density is positively related to regional productivity growth. This is found to be important even when only ties across plants that are not directly linked by labour mobility are included.

Keywords: Homophily; probability of ties; regional productivity growth; panel vector autoregression (search for similar items in EconPapers)
JEL-codes: D85 J24 J61 R11 R23 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (12)

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Working Paper: Co-worker networks, labour mobility, and productivity growth in regions (2015)
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