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Does related variety affect regional resilience? New evidence from Italy

Giulio Cainelli, Roberto Ganau and Marco Modica ()

No 1823, Papers in Evolutionary Economic Geography (PEEG) from Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography

Abstract: Although several contributions have studied the effect of related variety on the economic performance of firms and regions, its influence on regional resilience ? that is, regions' capacity to adapt to external shocks ? has received little attention. This paper contributes to this debate by analysing empirically the relationship between related variety and regional resilience at the Italian Local Labour Market (LLM) level. The analysis adopts the definition of regional resilience developed by Martin (2012), and employs spatial econometric techniques ? besides standard non-spatial models ? to analyse the role played by related variety as a short-run shock absorber with respect to the 2008 Great Recession. The results obtained from the estimation of Spatial Error Models suggest that LLMs characterised by a higher level of related variety have shown a higher capacity to adapt to an external shock, that is, the Great Recession. This evidence is confirmed with respect to two different short-run time horizons, the one-year period 2012-2013 and the three-year period 2010-2013.

Keywords: Regional Resilience; Related Variety; Local Labour Markets; Italy (search for similar items in EconPapers)
JEL-codes: B52 C21 R11 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-geo, nep-hme and nep-ure
Date: 2018-05, Revised 2018-05
References: View references in EconPapers View complete reference list from CitEc
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