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Heterogeneous relatedness and firm productivity

S. Stavropoulos (), Frank Oort () and Martijn Burger
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S. Stavropoulos: Erasmus University Rotterdam

The Annals of Regional Science, 2020, vol. 65, issue 2, No 5, 403-437

Abstract: Abstract In this manuscript, we relate regional structural composition—related and unrelated variety—to firm-level productivity in European regions, applying a Cobb–Douglas production function framework and using firm-, industry- and regional-level mixed hierarchical (multilevel) models. Our analyses indicate that regional-related variety has a positive impact on firm productivity in European regions, especially for firms in high-tech and medium-tech regions. These outcomes have implications for European policies on competitiveness as firms embedded in regions without these technological and institutional circumstances are systematically worse off in terms of productivity, and catching-up is not obvious for such regional economies.

JEL-codes: C31 O18 R11 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1007/s00168-020-00988-2

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