Industrial Dynamics and Regional Structural Change : Geographical Perspectives on Economic Evolution

Abstract: This thesis investigates the process of economic transformation taking place in Sweden since the mid 1970s. Especially, it is concerned with how and why benefits that firms and industries draw from regional co-location with other actors (agglomeration externalities) vary over stages of economic transformation. Drawing on recent findings within the fields of evolutionary economics and evolutionary economic geography, the thesis has a cumulative design, where three different theoretical frameworks are used to structure the research. First, building on the Technology Shift model, the industry (sector) level of structural change in Sweden from the 1970s is analyzed. Using uniquely detailed longitudinal time series on manufacturing and producer service industries, a growth taxonomy of all industries belonging to the manufacturing related sector of the Swedish economy is created. Findings indicate that the spectacular growth of the Swedish manufacturing industries during the transformation phase of the technology shift has been primarily concentrated within a few industries under strong, arguably technology-related, transformation pressures. Moreover, the investigations show that the manufacturing related industries are in total as important as ever to the Swedish economy. We also map the regional patterns of this structural change process and find that the regional divergence process that characterized the Swedish economy during the 1990s was primarily fuelled by the strong growth of the leading industries in the Stockholm region. Other industries show very stabile relative location patterns. Second, using the longitudinal time series with panel data estimations, we investigate how different kinds of agglomeration externalities impact industry performance over different stages of the industry life cycle. Overall, young industries tend to benefit from being located in diverse economic environments with a highly skilled work force. Mature industries, on the other hand, tend to thrive more in specialized low-cost locations. Third, we investigate if the impacts of agglomeration externalities on plant survival vary over the production stages of plants. The findings indicate that diverse environments are beneficial to the survival of plants in early stages of their life. Moreover, the results suggest that rather than focusing on the benefits of pure specialization in a region, research should consider the value of a large presence of technologically related industries. The new way we use to measure this "relatedness" between industries opens up to a variety of research questions. In sum, the results of the thesis emphasise the value of applying long-term theoretical perspectives to the study of regional economic transformation and agglomeration externalities.