Scandinavian Working Papers in Economics
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CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology KTH/CESIS Working Paper Series in Economics and Institutions of Innovation

No 195:
Scale and Scope - human capital and the structure of regional export flows

Martin Andersson () and Sara Johansson ()

Abstract: This paper presents an empirical analysis of the relationship between human capital endowments and the structure of regional export flows. Since the development of each export product may be assumed to be associated with innovation activity, requiring human capital inputs, the core hypothesis tested in this paper is that cross-regional variations in endowments of human capital influence the extensive margin (number of export products) rather than the intensive margin (average export value per product). The hypothesis is tested in a cross-regional regression model, applied to aggregate and within-industry export flows from Swedish regions. The empirical results confirm the theoretical prediction that the response of regional export flows to cross-regional variations in human capital is an increase in the extensive margin. To the extent that the regional human capital endowment affects the intensive margin, the effect is a higher average price per export product.

Keywords: product differentiation; knowledge; human capital; accessibility; export diversity; extensive margin; economies of scale; (follow links to similar papers)

JEL-Codes: F12; F14; R12; R32; (follow links to similar papers)

32 pages, September 28, 2009

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