Co-Worker Networks, Labour Mobility and Productivity Growth in Regions

Journal of Economic Geography; doi:10.1093/jeg/lbw027, p. 1-26, 2016

26 Pages Posted: 7 Oct 2016

See all articles by Balázs Lengyel

Balázs Lengyel

Hungarian Academy of Sciences (HAS) - Institute of Economics CERS-HAS (IEHAS); International Business School - Budapest (IBS)

Rikard Eriksson

University of Umea - Department of Geography and Economic History,

Date Written: August 28, 2016

Abstract

The mobility of workers is an important source of regional dynamics, but the effect of mobility on regional productivity growth is not straightforward, as some firms tend to win while others lose from mobility. In the present paper, we argue that the co-worker networks across plants that are established by labour moves are important for both local learning opportunities and job matching quality and should hence facilitate regional growth. We therefore propose a new homophily-biased perspective on coworker network creation and show that it suits geographical analyses better than random networks do. Moreover, panel vector autoregression models provide systematic evidence that an increase in co-worker network density is positively related to regional productivity growth. This is found to be important even when only ties across plants that are not directly linked by labour mobility are included.

Keywords: Homophily, Probability of Ties, Regional Productivity Growth, Panel Vector Autoregression

JEL Classification: D85, J24, J61, R11, R23

Suggested Citation

Lengyel, Balázs and Eriksson, Rikard, Co-Worker Networks, Labour Mobility and Productivity Growth in Regions (August 28, 2016). Journal of Economic Geography; doi:10.1093/jeg/lbw027, p. 1-26, 2016, Available at SSRN: https://ssrn.com/abstract=2848657

Balázs Lengyel (Contact Author)

Hungarian Academy of Sciences (HAS) - Institute of Economics CERS-HAS (IEHAS) ( email )

Budaorsi ut 45
Budapest, 1112
Hungary

International Business School - Budapest (IBS) ( email )

Záhony utca 7.
Budapest, 1031
Hungary

Rikard Eriksson

University of Umea - Department of Geography and Economic History, ( email )

Umea, SE-901 87
Sweden

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