Quality of government and social capital as drivers of regional diversification in Europe
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Publication date
2017-11
Authors
Cortinovis, Nicola
Xiao, Jing
Boschma, Ron
Van Oort, Frank
Editors
Advisors
Supervisors
Document Type
Article
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License
taverne
Abstract
Industrial diversification is crucial for economies to prosper. Recent studies have shown that regional economies tend to diversify into sectors that are related to those already present in the region. However, no study yet has investigated the impact of regional institutions. The objective of the article is to analyze how formal and informal institutions influence regional diversification. Studying 118 European regions in the period 2004-2012, we find evidence that institutions, and especially bridging social capital, matter for regions to diversify into new industries. Our results suggest that regional institutions relevant for diversification in regions are predominantly informal in character rather than formal, and bridging rather than bonding.
Keywords
Institutions, Quality of government, Regional diversification, Social capital, Taverne, Geography, Planning and Development, Economics and Econometrics, SDG 9 - Industry, Innovation, and Infrastructure
Citation
Cortinovis, N, Xiao, J, Boschma, R A & van Oort, F 2017, 'Quality of government and social capital as drivers of regional diversification in Europe', Journal of Economic Geography, vol. 17, no. 6, pp. 1179-1208. https://doi.org/10.1093/jeg/lbx001