Sector structure and cluster economies: A decomposition of regional labour productivity

OOSTERHAVEN J. and BROERSMA L. (2007) Sector structure and cluster economies: a decomposition of regional labour productivity, Regional Studies 41, 639-659. The paper shows that regional diffierences in labour productivity can be decomposed into a sector structure, a cluster economies and a residual regional component. The decomposition is applied to Dutch regional productivity levels and growth rates for 1990-2001. Sector structure accounts for about one-quarter of the diffierences in both the level and growth of productivity. Cluster economies account for one-quirter of the differences in levels and one-third of the differences in growth rates. Static cluster economies are predominantly positive, whereas positive and negative dynamic cluster ecollomies balance. Econometric analysis shows both components to be statistically highly significant.