Firms, Employment and Distance: Essays on the Swedish Regional Economy

Abstract: This thesis consists of three essays on the spatial relationships of economic activities in Swedish regions."Governmental Interventions and Market Potential - Determinants of Regional Variations in Firm Births"This paper examines determinants of regional variations in Swedish firm births over the period 1992-2002. I examine the role of self-employment grants, regional policy payments and market potential in a fixed effects regression model. Aggregate sector level regressions show that both self-employment grants and market potential have positive effects on firm birth. Regional policy effects are instead insignificant. The results are not sensitive to how we choose to define a new firm but differ between sectors when we introduce data on a disaggregated sector level."Which Economic Structures Foster Job Growth?"This paper is an empirical evaluation of how spatial structures affect dynamic externalities and their implication for job growth in different sectors. A model including local economic variables, natural advantages and unobserved regional differences is used to identify the underlying reasons for Swedish employment concentrations between the years 1993 and 2004. The relationship between economic structures and local labor growth is investigated in a municipality setting in order to capture labor transfers and spillovers with limited geographical reach. Special focus is given to the importance of municipal diversity, specialization and market potential. Sectoral regressions are executed in two steps; first by examining structures within the own region and then by including close municipalities to also account for spatial effects."How Good an Approximation to Actual Distance is Crow Distance?"This paper examines the importance of how distance is measured. I use a Swedish data set of distance between municipalities and compare four different location and distance collecting methods which are all used in empirical analysis. The first two data sets are given as crow distance between locations and differ in the way we choose to impose a municipality center. I also introduce two journey based distance approaches; shortest road travel distance and travel time. The focus of the paper is to investigate whether the latter more detailed distance data makes a difference to economic empirical research on market potential and regional wage differences. I start the study with an examination of distance differences and continue with an analysis of the impact of distance on total market access measurements. The impact of the different measures is also investigated in a simple wage equation. Due to great data similarities in both market potential and throughout all regressions, I conclude there to be no strong case for not using a simple crow distance measure in this type of regional analysis.