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Agents of structural change. The role of firms and entrepreneurs in regional diversification

Frank Neffke, Matté Hartog (), Ron Boschma () and Martin Henning ()

No 1410, Papers in Evolutionary Economic Geography (PEEG) from Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography

Abstract: Who introduces structural change in regional economies: Entrepreneurs or existing firms? And do local or non-local firms and entrepreneurs create most novelty in a region? Using matched employer-employee data for the whole Swedish workforce, we determine how unrelated and therefore how novel the activities of different establishments are to a region’s industry mix. Up- and downsizing establishments cause large shifts in the local industry structure, but these shifts only occasionally require an expansion of local capabilities because the new activities are often related to existing local activities. Indeed, these incumbents tend to align their production with the local economy, deepening the region’s specialization. In contrast, structural change mostly originates via new establishments, especially those with non-local roots. Moreover, although entrepreneurs start businesses more often in activities unrelated to the existing regional economy, new establishments founded by existing firms survive in such activities more often, inducing longer-lasting changes in the region.

Keywords: Structural change; entrepreneurship; diversification; relatedness; regions; resource-based view (search for similar items in EconPapers)
Pages: 56 pages
Date: 2014-04, Revised 2014-04
New Economics Papers: this item is included in nep-bec, nep-ent, nep-geo and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (33)

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http://econ.geo.uu.nl/peeg/peeg1410.pdf Version April 2014 (application/pdf)

Related works:
Journal Article: Agents of Structural Change: The Role of Firms and Entrepreneurs in Regional Diversification (2018) Downloads
Working Paper: Agents of Structural Change; The role of firms and entrepreneurs in regional diversification (2014) Downloads
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