The Role of Entry and Market Selection for the Dynamics of Regional Diversity and Specialization

Florian Noseleit ()

Regional Studies, 2015, vol. 49, issue 1, 76-94

Abstract: Noseleit F. The role of entry and market selection for the dynamics of regional diversity and specialization, Regional Studies . Despite predictions that economic integration leads to increasing specialization, the opposite development has been observed at the regional level. Based on nearly three decades of West German data, this paper addresses the diversification of regional economic activity and emphasizes the role of industry dynamics, specifically newly entering business cohorts. Although a strong sectoral specialization evolves in the entry cohorts within and between regions over time, entries substantially increase the overall diversity of regions. Market selection favoured less similar entries in comparison with the initial industry structure and, thus, allowed regional diversity to increase. Overall, the regional specialization processes within each entry cohort did not become less important; however, the fields of regional specialization changed continuously over time, resulting in more diversity.

Date: 2015
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DOI: 10.1080/00343404.2012.708729

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