KTH/CESIS Working Paper Series in Economics and Institutions of Innovation
LABOR MOBILITY, KNOWLEDGE DIFFUSION AND REGIONAL GROWTH
Abstract: This paper investigates the relationship between
inter-firm labor mobility and regional productivity growth. Previous
studies have shown that density is positively correlated with growth. I
claim that it is not density in itself, but rather the attributes
associated with it that drives economic growth. One such attribute is the
increased possibility for labor mobility and knowledge diffusion that
follows when firms and individuals locate in close proximity to each other.
This hypothesis is tested using a matched employer-employee dataset where
regional labor mobility is instrumented with density. The result shows that
labor mobility increases regional growth rates.
Keywords: Labor mobility; regional growth; agglomeration economies; (follow links to similar papers)
JEL-Codes: J62; R11; R23; (follow links to similar papers)
41 pages, December 18, 2009
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