Quality of government and social capital as drivers of regional diversification in Europe

Nicola Cortinovis, Jing Xiao, Ron Boschma () and Frank Oort

Journal of Economic Geography, 2017, vol. 17, issue 6, 1179-1208

Abstract: Industrial diversification is crucial for economies to prosper. Recent studies have shown that regional economies tend to diversify into sectors that are related to those already present in the region. However, no study yet has investigated the impact of regional institutions. The objective of the article is to analyze how formal and informal institutions influence regional diversification. Studying 118 European regions in the period 2004–2012, we find evidence that institutions, and especially bridging social capital, matter for regions to diversify into new industries. Our results suggest that regional institutions relevant for diversification in regions are predominantly informal in character rather than formal, and bridging rather than bonding.

Keywords: Regional diversification; social capital; quality of government; institutions (search for similar items in EconPapers)
JEL-codes: O14 R11 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (80)

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Working Paper: Quality of government and social capital as drivers of regional diversification in Europe (2016)
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