This study investigates the relationship between labour market externalities and regional growth based on real labour flows. In particular, we test for the importance of labour mobility across so-called skill-related industries. We make use of a sophisticated indicator that measures the degree...

Related variety is important to regional growth because it induces knowledge transfer between complementary sectors at the regional level. This is accomplished through three mechanisms: spinoff dynamics, labor mobility and network formation. They transfer knowledge across related sectors, which...