KTH/CESIS Working Paper Series in Economics and Institutions of Innovation
Regional Interaction & Economic Diversity - exploring the role of geographically overlapping markets for a municipality’s diversity in retail and durables
() and Johan Klaesson
Abstract: This paper is devoted to the study of municipal diversity
in retail and durables. Specifically, it analyzes how a region’s relative
market-accessibility in a system (or hierarchy) of municipalities affects
the extent of diversity. In the theoretical part of the paper a simple
modelmunicipal diversity in retail and durables is introduced, which
incorporates the municipality’s position in a system of municipalities.
Using this model as a point of reference, the paper explores the
relationship between market-size and diversity in Swedish regions from 1993
to 2001 by means of a panel data approach. Three types of market-sizes are
considered: (i) intramunicipal,(ii) intra-regional and (iii)
extra-regional. It is shown that the relationships between diversity and
the three types of market-sizes differ between different types of
municipalities in the hierarchy, implying that such a classification is
warranted. One particular finding that corresponds to the agglomeration
shadow-effects usually discussed in NEG-theories is that large
municipalities gain from proximity to surrounding municipalities while
small municipalities do not.
Keywords: diversity; accessibility; retail; durables; market potential; market size; hierarch systems; management; technological change; trade unions.; (follow links to similar papers)
JEL-Codes: L10; O10; (follow links to similar papers)
18 pages, March 28, 2006
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