Scandinavian Working Papers in Economics

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

No 71: Agglomeration, Diversity and Regional Growth

Pontus Braunerhjelm () and Benny Borgman
Additional contact information
Pontus Braunerhjelm: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology, Postal: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology, SE-100 44 Stockholm, Sweden
Benny Borgman: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology, Postal: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology, SE-100 44 Stockholm, Sweden

Abstract: The objective of this paper is to empirically examine the importance of the structure of agglomeration on productivity and growth. To accomplish this we will include the degree of co-agglomeration of similar industries as an explanatory variable in the empirical analysis, while simultaneously controlling for the degree of industry-specific agglomeration. To the best of our knowledge, the impact of co-agglomerated industries on productivity has not previously been investigated. The empirical analysis confirms a positive statistical relationship between interdependent and co-located industries on labour productivity.

Keywords: Co-agglomeration; productivity; growth

JEL-codes: R11; R12

31 pages, August 3, 2006

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