Industrial Growth and Dynamic Externalities: the Case of Sweden

This study examines the relevance of various theories of knowledge spillovers and growth using a data set on geographic concentration, diversity and competition in 24 counties in Sweden between 1977 and 1996. The results suggest that local competition as opposed to urban variety and regional specialization seems to encourage employment growth. Thus, the evidence is largely consistent with parts of the hypotheses proposed by Porter and Jacobs, but the MAR theory does not receive empirical support based on the evidence presented in the present study.