Related Variety, Unrelated Variety and Regional Functions: A spatial panel approach

Matthias Brachert (), Alexander Kubis and Mirko Titze

No 1301, Papers in Evolutionary Economic Geography (PEEG) from Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography

Abstract: The paper presents estimates for the impact of related variety, unrelated variety and the functions a region performs in the production process on regional employment growth in Germany. We argue that regions benefit from the existence of related activities that facilitate economic development. Thereby the sole reliance of the related and unrelated variety concept on standard industrial classifications (SIC) remains debatable. We offer estimations for establishing that conceptual progress can be made when the focus of analysis goes beyond solely considering industries. We develop an industry-function based approach of related and unrelated variety and test our hypothesis by the help of spatial panel approach. Our findings suggest that related variety as same as unrelated variety facilitate regional employment growth in Germany. However, the drivers behind these effects do differ. While the positive effect of related variety is driven by high degrees of relatedness in the regional “R&D” and “White-Collar”-functions, the effects of unrelated variety are spurred by “Blue Collar”-functions in this period.

Pages: 24 pages
Date: 2013-01, Revised 2013-01
New Economics Papers: this item is included in nep-geo and nep-ure
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Citations: View citations in EconPapers (12)

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Persistent link: https://EconPapers.repec.org/RePEc:egu:wpaper:1301

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