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Regional Economic Diversity and its Effects on Regional Economic Stability: Case of Sweden
KTH, School of Industrial Engineering and Management (ITM), Industrial Economics and Management (Dept.), Entrepreneurship and innovation.
2016 (English)Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE creditsStudent thesis
Abstract [en]

Economic stability is important for designing regional economic policies aiming at economic growth, income distribution, levels of unemployment and economic activity in a region, as well as stable investment flows for regional development. By “conventional wisdom” regional industrial diversity is often viewed as a remedy to achieve higher economic stability. Previous empirical findings in the area mostly show that indeed more diversified regions are less prone to economic volatilities. However, there is much inconsequence in existing literature coming from various methodology and approaches used in the studies. This master thesis aims to examine if any statistical relationship exists between regional economic stability and regional economic diversity using regional economic data on Swedish counties during 1989–2013. Study results show that while regional industry structure clearly matters for economic volatility along time, positive effects of regional economic diversity as such on economic stability are disputable. Thus, estimation results on such effects are sensitive to methodology choice, i.e. industry aggregation level, time periods’ length or economic diversity measures. Further research implementing robustness tests to these methodology differences would be beneficial for this research field.

Place, publisher, year, edition, pages
2016. , 68 p.
Keyword [en]
Regional Economics, Regional Economic Diversity, Regional Economic Stability, Economic volatility
National Category
Economics and Business
URN: urn:nbn:se:kth:diva-189515OAI: diva2:946462
Available from: 2016-07-11 Created: 2016-07-05 Last updated: 2016-07-11Bibliographically approved

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