Dynamic Externalities in Denmark: An Analysis of Danish Industry Structures & Regional Growth

Christian Nedergaard Pedersen & Niels Kjær Rahbek

Studenteropgave: Kandidatafhandlinger


Theories on endogenous growth highlight that knowledge spillovers are crucial in promoting regional development. While the theories of Marshall-Arrow-Romer, Porter, Jacobs, and the Schumpeterian Growth Model agree on the importance of dynamic externalities, they differ in terms of what industry structures best ensure economic growth. Specifically, this controversy centers on the effects of industrial specialization, competition, and diversification. The purpose of this study is to investigate the relationship between the industry structure and regional growth in 29 Danish commuting zones from 2008 to 2019. Using data from Statistics Denmark, this paper applies commuting zone-industry employment as a proxy for regional growth in a fixed effects regression model. The main finding of this paper is that local specialization and less fierce competition encourage employment growth in Danish commuting zone industries. This result suggests that knowledge spillovers occur within rather than across industries, consistent with the theories of Marshall-Arrow-Romer. On the basis of this analysis, three explicit recommendations are proposed for policymakers to ensure optimal growth opportunities for Danish regions

UddannelserCand.merc.aef Applied Economics and Finance, (Kandidatuddannelse) Afsluttende afhandling
Antal sider107
VejledereKarl Harmenberg