Labour Market Externalities and Regional Growth in Sweden: The Importance of Labour Mobility between Skill-Related Industries

Boschma R., Eriksson R. H. and Lindgren U. Labour market externalities and regional growth in Sweden: the importance of labour mobility between skill-related industries, Regional Studies. This study investigates the relationship between labour market externalities and regional growth based on real labour flows. In particular, it tests for the importance of labour mobility across so-called skill-related industries between 435 four-digit industries within 72 Swedish functional regions (1998–2002). Both the fixed-effect models and generalized method of moments (GMM) estimates demonstrate that a strong intensity of intra-regional labour flows between skill-related industries impacts positively on regional productivity growth, but less so on employment growth. Labour mobility between unrelated industries tends to dampen regional unemployment growth while a high degree of intra-industry labour flows is only found to be associated with rising unemployment.

[1]  D. Angel.  High-Technology Agglomeration and the Labor Market: The Case of Silicon Valley , 1991 .

[2]  Daniel A. Levinthal,et al.  ABSORPTIVE CAPACITY: A NEW PERSPECTIVE ON LEARNING AND INNOVATION , 1990 .

[3]  Jinyoun Kim,et al.  Labor Mobility of Scientists, Technological Diffusion, and the Firm's Patenting Decision , 2001 .

[4]  Dominic Power,et al.  Working through Knowledge Pools: Labour Market Dynamics, the Transference of Knowledge and Ideas, and Industrial Clusters , 2004 .

[5]  Rik Wenting,et al.  Spinoff dynamics and the spatial formation of the fashion design industry, 1858-2005 , 2008 .

[6]  David L. Rigby,et al.  Marshallian Localization Economies: Where Do They Come From and To Whom Do They Flow? , 2009 .

[7]  E. Glaeser,et al.  Growth in Cities , 1991, Journal of Political Economy.

[8]  S. Iammarino,et al.  The structure and evolution of industrial clusters: Transactions, technology and knowledge spillovers , 2006 .

[9]  A. Agrawal,et al.  Gone but not Forgotten: Knowledge Flows, Labor Mobility, and Enduring Social Relationships , 2006 .

[10]  Srilata Zaheer,et al.  Knowledge Retention and Personnel Mobility: The Nondisruptive Effects of Inflows of Experience , 2003, Organ. Sci..

[11]  C. Sabel,et al.  Roepke Lecture in Economic Geography Venture Capital in the “Periphery”: The New Argonauts, Global Search, and Local Institution Building , 2008 .

[12]  A. Pyka,et al.  Elgar Companion to Neo-Schumpeterian Economics , 2009 .

[13]  P. Krugman.  Adjustment and growth in the European Monetary Union: Lessons of Massachusetts for EMU , 1993 .

[14]  A. Malmberg.  Beyond the cluster. Local milieus and global connections , 2003 .

[15]  Jesper B. Sørensen.  Executive Migration and Interorganizational Competition , 1999 .

[16]  Rikard Eriksson,et al.  Localized mobility clusters: impacts of labour market externalities on firm performance , 2008 .

[17]  R. Boschma,et al.  The effect of intra- and inter-regional labour mobility on plant performance in Denmark: the significance of related labour inflows , 2014 .

[18]  J. Essletzbichler.  The Geography of Gross Employment Flows in British Manufacturing , 2007 .

[19]  M. Andersson,et al.  Labor Mobility And Spatial Density , 2011 .

[20]  A. Marshall.  Principles of Economics: An Introductory Volume , 1949 .

[21]  E. Lundholm.  ARE MOVERS STILL THE SAME? CHARACTERISTICS OF INTERREGIONAL MIGRANTS IN SWEDEN 1970–2001 , 2007 .

[22]  Richard Walker,et al.  The Capitalist Imperative: Territory, Technology, and Industrial Growth. , 1989 .

[23]  Jianmin Tang,et al.  The uncertain city: Competitive instability, skills, innovation and the strategy of agglomeration , 2006 .

[24]  Max Nathan.  The Long Term Impacts of Migration in British Cities: Diversity, Wages, Employment and Prices , 2011 .

[25]  Michael Porter,et al.  The Economic Performance of Regions , 2003 .

[26]  Dale T. Mortensen,et al.  Chapter 15 Job search and labor market analysis , 1986 .

[27]  K. Frenken,et al.  Related Variety, Unrelated Variety and Regional Economic Growth , 2007 .

[28]  Damon J. Phillips.  A Genealogical Approach to Organizational Life Chances: The Parent-Progeny Transfer among Silicon Valley Law Firms, 1946–1996 , 2002 .

[29]  G. Becker,et al.  Investment in Human Capital: A Theoretical Analysis , 1962, Journal of Political Economy.

[30]  Daron Acemoglu,et al.  A Microfoundation for Social Increasing Returns in Human Capital Accumulation , 1996 .

[31]  A. Malmberg,et al.  Brain circulation and flexible adjustment: labour mobility as a cluster advantage , 2011 .

[32]  R. Solow.  TECHNICAL CHANGE AND THE AGGREGATE PRODUCTION FUNCTION , 1957 .

[33]  A. Chandler,et al.  Regional Advantage: Culture and Competition in Silicon Valley and Route 128 , 1994 .

[34]  Ron Boschma,et al.  The Dynamics of Agglomeration Externalities along the Life Cycle of Industries , 2011 .

[35]  Ron Boschma,et al.  The Emergence of New Industries at the Regional Level in S pain: A Proximity Approach Based on Product Relatedness , 2013 .

[36]  P. Hallen,et al.  Mobility in Europe. Analysis of the 2005 Eurobarometer survey on geographical and labour market mobility , 2006 .

[37]  Rikard Eriksson,et al.  Agglomeration Mobility: Effects of Localisation, Urbanisation, and Scale on Job Changes , 2008 .

[38]  Catherine Beaudry,et al.  Who's right, Marshall or Jacobs? The localization versus urbanization debate , 2009 .

[39]  L. Pil.  The Rise of the Creative Class , 2004 .

[40]  Glenn Ellison,et al.  What Causes Industry Agglomeration? Evidence from Coagglomeration Patterns , 2007 .

[41]  R. Boschma,et al.  Related variety and regional growth in Spain , 2011 .

[42]  G. J. Berg.  A STRUCTURAL DYNAMIC ANALYSIS OF JOB TURNOVER AND THE COSTS ASSOCIATED WITH MOVING TO ANOTHER JOB , 1992 .

[43]  Paul Almeida,et al.  Learning - by - Hiring: When Is Mobility More Likely to Facilitate Interfirm Knowledge Transfer? , 2003, Manag. Sci..

[44]  Gino Cattani,et al.  Competitive Implications of Interfirm Mobility , 2006, Organ. Sci..

[45]  Frank Neffke,et al.  Revealed Relatedness: Mapping Industry Space , 2008 .

[46]  Koen Frenken,et al.  The Evolution of Inventor Networks in the silicon Valley and Boston Regions , 2007, Adv. Complex Syst..

[47]  Paul Bishop,et al.  Spatial Externalities, Relatedness and Sector Employment Growth in Great Britain , 2010 .

[48]  P. Bishop.  SPATIAL SPILLOVERS AND THE GROWTH OF KNOWLEDGE INTENSIVE SERVICES , 2008 .

[49]  The Resilience of Dutch Regions to Economic Shocks. Measuring the relevance of interactions among firms and workers , 2012 .

[50]  G. Duranton,et al.  Micro-Foundations of Urban Agglomeration Economies , 2003 .

[51]  Michael S. Dahl,et al.  Knowledge flows through informal contacts in industrial clusters: myth or reality? , 2004 .

[52]  Koen Frenken,et al.  Entropy statistics and information theory , 2007 .

[53]  James B. Rebitzer,et al.  Job-Hopping in Silicon Valley: Some Evidence Concerning the Microfoundations of a High-Technology Cluster , 2006, The Review of Economics and Statistics.

[54]  David Roodman.  How to do Xtabond2: An Introduction to Difference and System GMM in Stata , 2006 .

[55]  W. Boeker.  Executive Migration and Strategic Change: The Effect of Top Manager Movement on Product-Market Entry , 1997 .

[56]  A. Bernard,et al.  Why Some Firms Export , 2001, Review of Economics and Statistics.

[57]  P. McCann,et al.  Innovation, knowledge spillovers and local labour markets , 2005 .

[58]  D. Cobham.  Adjustment and growth in the European Monetary Union , 1995 .

[59]  B. Kogut,et al.  Localization of Knowledge and the Mobility of Engineers in Regional Networks , 1999 .

[60]  R. Lucas.  On the Mechanics of Economic Development , 1988 .

[61]  S. Breschi,et al.  Mobility of Skilled Workers and Co-Invention Networks: An Anatomy of Localized Knowledge Flows , 2009 .

[62]  Hairul Azlan Annuar,et al.  Foreign investors' interests and corporate tax avoidance: Evidence from an emerging economy , 2015 .

[63]  Rebecca Henderson,et al.  DO FIRMS CHANGE CAPABILITIES BY HIRING NEW PEOPLE? A STUDY OF THE ADOPTION OF SCIENCE-BASED DRUG DISCOVERY , 2004 .

[64]  Rikard Eriksson,et al.  Papers in Evolutionary Economic Geography # 10 . 04 Localized Spillovers and Knowledge Flows : How Does Proximity Influence the Performance of Plants ? , 2010 .

[65]  Nick Henry,et al.  Paul Krugman's geographical economics, industrial clustering and the British motor sport industry. , 1999 .

[66]  Franz Huber,et al.  Do clusters really matter for innovation practices in Information Technology? Questioning the significance of technological knowledge spillovers , 2012 .

[67]  D. Puga,et al.  THE MAGNITUDE AND CAUSES OF AGGLOMERATION ECONOMIES∗ , 2009 .

[68]  Ron Boschma,et al.  Related Variety, Trade Linkages, and Regional Growth in Italy , 2009 .

[69]  E. Glaeser,et al.  The Complementarity between Cities and Skills , 2009 .

[70]  Francesco Quatraro,et al.  Knowledge Coherence, Variety and economic Growth: Manufacturing Evidence from Italian Regions , 2010 .

[71]  A. Malmberg,et al.  Agglomeration and Firm Performance: Economies of Scale, Localisation, and Urbanisation among Swedish Export Firms , 2000 .

[72]  A. Malmberg,et al.  (How) Do (Firms in) Clusters Create Knowledge? , 2005 .

[73]  Jun Zhang.  Related Variety, Global Connectivity and Institutional Embeddedness: Internet Development in Beijing and Shanghai Compared , 2011 .

[74]  Rikard Eriksson,et al.  How does labour mobility affect the performance of plants? The importance of relatedness and geographical proximity , 2008 .

[75]  Jacques Poot,et al.  Agglomeration Externalities, Innovation and Regional Growth: Theoretical Perspectives and Meta-Analysis , 2008 .

[76]  C. Dustmann,et al.  The labour market impact of immigration , 2008 .

[77]  P. Combes,et al.  Labor Pooling, Labor Poaching and Spatial Clustering , 2001 .

[78]  Labor Mobility, Knowledge Diffusion and Regional Growth , 2009 .