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Localized knowledge spillovers and regional employment growth: evidence from Germany

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  • Bode, Eckhardt

Abstract

The present paper aims at explaining the regional deconcentration of economic activities in (West) Germany during the past two decades. Using an idea-based endogenous growth model that encloses several innovative sectors, that subjects economic activity to externalities of agglomeration, and that alows for interregional labor migration, we test the hypothesis that human-capital intensive activities in (technical) manufacturing R&D, manufacturing management, and producer services continue to concentrate on agglomerations because of localized knowledge spillovers, while manufacturing production which does not benefit directly from knowledge spillovers deconcentrates because of agglomeration diseconomies. As an indicator of economic activities we use employment instead of value added since data on value added, resp. income, are not available from public statistics in Germany at a regionally and occupationally sufficiently disaggregated level. The empirical results on employment dynamics in 75 West-German regions during the time period 1976-1994 are in line with the hypothesis on spatial deconcentration of manufacturing production due to agglomeration diseconomies, but clearly reject the hypothesis on ongoing spatial concentration of high-skilled workers driven by knowledge spillovers. Thus, we conclude that in Germany localized knowledge spillovers may have been too weak to ensure endogenous growth. Finally, a number of shortcomings with respect to theory and data availability are discussed.

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  • Bode, Eckhardt, 1999. "Localized knowledge spillovers and regional employment growth: evidence from Germany," Kiel Working Papers 938, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkwp:938
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    Cited by:

    1. Sauer, Thomas & Stoetzer, Matthias-Wolfgang & Gerlach, Andrea, 2007. "Forms and regional distribution of knowledge transfer by German universities," Jena Contributions to Economic Research 2007,3, Ernst-Abbe-Hochschule Jena – University of Applied Sciences, Department of Business Administration.
    2. Knodler, Hermann & Albertshauser, Ulrich, 2001. "Glocalisation, Foreign Direct Investment and Regional Development Perspectives: Empirical Results for West German Regions," Discussion Paper Series 26402, Hamburg Institute of International Economics.
    3. Jens Suedekum, 2006. "Concentration and Specialization Trends in Germany since Re-unification," Regional Studies, Taylor & Francis Journals, vol. 40(8), pages 861-873.
    4. Gerlach, Andrea & Sauer, Thomas & Stoetzer, Matthias-Wolfgang, 2005. "Formen und regionale Verteilung des Wissenstransfers von Hochschulen: Eine repräsentative Fallstudie für Jena," Jena Contributions to Economic Research 2005,1, Ernst-Abbe-Hochschule Jena – University of Applied Sciences, Department of Business Administration.
    5. Funke, Michael & Niebuhr, Annekatrin, 2000. "Spatial R&D Spillovers and Economic Growth - Evidence from West Germany," Discussion Paper Series 26396, Hamburg Institute of International Economics.
    6. Anne Otto & Michaela Fuchs & Wolfgang Dauth, 2011. "Long-term processes of regional concentration and dispersion - fuzzy evidence for Western Germany," ERSA conference papers ersa10p537, European Regional Science Association.
    7. Niebuhr, Annekatrin, 2000. "Räumliche Wachstumszusammenhänge – Empirische Befunde für Deutschland," HWWA Discussion Papers 84, Hamburg Institute of International Economics (HWWA).
    8. Knödler, Hermann & Albertshauser, Ulrich, 2001. "Glocalisation, foreign direct investment and regional development perspectives: Empirical results for West German regions," HWWA Discussion Papers 117, Hamburg Institute of International Economics (HWWA).
    9. Alejandro Diaz-Bautista, 2005. "Convergence and Economic Growth considering Human Capital and R&D Spillovers Convergencia y Crecimiento Economico en Mexico considerando al Capital Humano y derrames en Investigacion y Desarrollo," Urban/Regional 0506012, University Library of Munich, Germany.

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    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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