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Gauging two sides of regional economic resilience in Western Germany—Why sensitivity and recovery should not be lumped together

Franziska Pudelko (), Christian Hundt () and Linus Holtermann ()
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Franziska Pudelko: Philipps University Marburg
Christian Hundt: Johann Heinrich von Thünen Institute
Linus Holtermann: Ruhr University Bochum

Review of Regional Research: Jahrbuch für Regionalwissenschaft, 2018, vol. 38, issue 2, 141-189

Abstract: Abstract The paper empirically investigates the economic resilience of Western German regions in the wake of the Great Recession of 2008/2009. In particular, the focus is laid on the influence of regional agglomeration economies (arising from specialisation, related and unrelated variety) and the explicit subdivision of short-term resilience into sensitivity and recovery. The necessity to distinguish between different factors and phases is well documented by means of the spatial lag and OLS regression results as all three types of agglomeration economies reveal varying, if not opposing directions of influences across the sensitivity and recovery phase. A pregnant example refers to regional specialisation. Not only does it increase sensitivity while exerting a positive influence during the recovery phase, but it is also mediated by the regional share in manufacturing workforce. This workforce reveals opposing phase-specific effects itself. Hence, ignoring the two-component structure of short-term resilience entails the risk of imprecise, if not false conclusions on the driving mechanisms stabilising and/or destabilising regional economies in times of crisis.

Keywords: Regional resilience; Economic shocks; Sensitivity and recovery; Great Recession 2008/2009; Western Germany; Specialisation; Unrelated variety; Related variety (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:spr:jahrfr:v:38:y:2018:i:2:d:10.1007_s10037-018-0124-4