Professor Philippe Aghion is the 2016 recipient of the Global Award for Entrepreneurship Research, consisting of 100,000 Euros and a statuette designed by the internationally renowned Swedish sculptor Carl Milles. He is one of the most influential researchers worldwide in economics in the last couple of decades. His research has advanced our understanding of the relationship between firm-level innovation, entry and exit on the one hand, and productivity and growth on the other. Aghion has thus accomplished to bridge theoretical macroeconomic growth models with a more complete and consistent microeconomic setting. He is one of the founding fathers of the pioneering and original contribution referred to as Schumpeterian growth theory. Philippe Aghion has not only contributed with more sophisticated theoretical models, but also provided empirical evidence regarding the importance of entrepreneurial endeavours for societal prosperity, thereby initiating a more nuanced policy discussion concerning the interdependencies between entrepreneurship, competition, wealth and growth.

Research on Schumpeterian entrepreneurship identifies new high-growth startup companies as key factors in technological innovation and economic growth. While economists have tended to focus on high-growth, high-tech startup firms as the unit of analysis, economic geographers and urbanists have examined the geographic dimensions of entrepreneurship, particularly the rise of entrepreneurial clusters and eco systems. We focus here on a particular type of Schumpeterian entrepreneurship associated with high-tech startup companies, or what we refer to as “tech-startup entrepreneurship.” We contend that the organization of such Schumpeterian entrepreneurship occurs at two spatial scales. At the macro-geographic level, it is highly clustered and concentrated in a relatively small number of global cities or metro areas. At the micro-geographic level, it is highly concentrated in distinct districts or micro-clusters within these leading cities and metro areas. To examine the geographic dimensions of tech-startup entrepreneurship across these spatial scales, we use previously unused data on venture capital-financed startups at the metropolitan and district levels. Our findings support the hypothesis that tech-startup entrepreneurship is organized across two distinct but related spatial scales, which act on entrepreneurial activity through different mechanisms. These findings suggest that local diversity and local specialization can simultaneously potentiate innovation, and that a multi-scalar approach to the geography of entrepreneurship is prudent.

Innovation by firms and industries requires that the individual firm can combine internal and external knowledge resources. This paper studies product innovations as they are reflected by product varieties and destination markets, combined into observations of firms’ destination-specific varieties(variety pairs). The number of varieties (identified in this way) measuresthe extensive margin of exportflows from industries in local economies, reflecting past product and market (destination) innovations made by industries in each local economy. The empirical analysis identifies for each industry and local economy (i) the intra-industry knowledge resources, (ii) the local access to the supply knowledge-intensive producer services, and (iii) the access to the supply of knowledge-intensive producer servicesoutside the local economy. Thepapercontributes to existing knowledgein several ways. First, it introduces a knowledge-supply accessibility measure to model the local innovation milieu. Second, it shows the joint contribution to product innovation from internal and external knowledge sources. The estimation results supports the hypothesis that innovations are generated in the conjunction of internal and external knowledge.

The geographic scale at which density externalities operate is analysed in this paper. Using geocoded high-resolution data, the analysis is focused on exogenously determined within-city squares (‘neighbourhoods’) of 1 km². The analysis confirms a city-wide employment density–wage elasticity and an economically significant density–wage elasticity at the neighbourhood level that attenuate sharply with distance. Panel estimates over 20 years suggest a neighbourhood density–wage elasticity of about 3%, while the city-wide elasticity is about 1%. It is argued that the neighbourhood level is more prone to capture learning, e.g. through knowledge and information spillovers. This interpretation is supported by (1) significantly larger neighbourhood elasticities for university educated workers and (2) sharper attenuation with distance of the effect for such workers.

We analyse the determinants of self-employment and focus on the contextual environment. By distinguishing between commuters and non-commuters we are able to analyse the influence from the work and home environment, respectively. Our results indicate a significant difference between non-commuters and commuters in terms of the role of networks for becoming self-employed. Our results indicate that it is the business networks where people work, rather than where they live that exerts a positive influence on the probability of becoming self-employed. These effects are further robust over educational and occupational categories.

This paper examines the effects of human capital on the growth and survival of a large sample of Swedish businesses. Human capital is represented by conventional measures of the educational attainment and experience of an establishment’s workers and skills-based measures of the types of occupations present in the company. Controlling for an establishment’s size and age, as well as its industry and region of location, we find that the human capital embodied in a company’s workers affects its performance. The specific effects, however, depend on how human capital is measured and whether the analysis focuses on growth or survival.

This paper studies the effects of family governance and ownership on firm employment growth, extending existing knowledge by including in the analysis the regional context in which firms are located. We create a regional taxonomy to capture the urban–rural dimension and combine this with the corporate governance structure of the firm. Our results show that, being a family firm per se does not influence employment growth. However, when corporate governance structure and regional context are combined, the urban–rural context influences family firm and nonfamily firm employment growth differently, with family firms exhibiting greater employment growth, compared with nonfamily firms, in rural areas.

This paper explores the patterns of innovation and collaboration by using unique regional survey data on more than 600 Swedish firms. The data also include the smallest firms, which have been largely neglected in the existing literature on innovations. In the context of collaboration, however, small firms are of particular interest because external interactions and joint projects can be expected to play a very central role in innovation processes in firms where internal resources are very limited. The results show that the probability of innovation is higher among collaborating firms, yet not all types of collaborations matter. Extra-regional collaborations appear as most important in promoting firm innovation, and collaboration seems to be most favourable when the partners involved have some organizational or knowledge relatedness. Small firms, in particular, seem to gain from such extra-regional linkages.

Two major challenges in Europe’s rural areas are an aging population and the diminishing share of human capital. While this pattern has been occurring for a long time, the effects are becoming acutely visible and impactful. The long-term loss of younger individuals has in many ways “drained” the labor market and the economic market power of rural areas. This is the context of our research: the locational choice of university graduates from an urban–rural perspective. Using micro data covering the entire Swedish population, we identify all university graduates from the year 2001. We analyze them with respect to whether they live in a rural or urban region before starting university and where they live after graduation at two points in time: 5 and 10 years. We use a series of multinomial logit regressions to determine what factors affect their short-term and long-term choices of location. We find that having children is one of the most influential factors for moving back home after graduation, irrespective of type of region. We find only minor differences between the two time perspectives.

This paper examines how institutional investors influence investment decisions and returns on investment. To measure investment performance, we use marginal q, which measures the ratio of the return on investment to the cost of capital. Institutional owners are found to have a positive but marginally diminishing effect on performance. Our paper uses longitudinal data on Swedish firms from 1999 to 2005; during this period, the ownership structure of Swedish firms underwent dramatic changes as institutional investors increased their ownership shares, while ownership by Swedish households decreased. However, controlling owners - who were often founding families - maintained their control of firms by resorting to extensive use of dual-class shares. This was an important determinant of firm performance that eradicated the positive influence of institutional ownership.

Entrepreneurship can have important positive effects linked to job creation, wealth and income generation, innovation and industry competitiveness. Scholars and policy-makers around the world have turned to the regulatory environment as a mechanism through which entrepreneurship can be encouraged, grown and its economic benefits harnessed. The effect of regulatory conditions on entrepreneurship however is not well understood, and can be nuanced given the wide range of regulatory tools and possible areas of impact. This paper serves as the introduction to a special issue, which seeks to shed some light on the relationship between regulation, firm dynamics and entrepreneurship. We identify some foundational considerations relevant to this relationship and discuss key questions, followed by a brief overview of each of the papers contained in the special issue.

Profits that persist above or below the norm for prolonged periods of time revile a lack of competition and imply systematic misallocation of resources. Competition, if unimpeded, should restore profits to normal levels within a relatively short time frame. The dynamics of profits can thus reveal a great deal about the competitiveness of an economy. This paper estimates the persistence of profits across the European Union (EU), which adds to our understanding of the competitiveness of 19 EU-member states. By using a sample of approximately 5,500 firms with 54,000 observations across the time period of 1995 to 2013, we find differences in the persistence of short-run profits, implying that there are differences in competitiveness across the EU. Hungary and Greece are amongst the countries with the highest profit persistence, whereas the United Kingdom exhibits among the lowest persistence of profits. Furthermore, we provide evidence that there are significant permanent rents present in EU.

Profits that persist above or below the norm for prolonged periods of time reveal a lack of competition and imply a systematic misallocation of resources. Competition, if unimpeded, should restore profits to normal levels within a relatively short time frame. The dynamics of profits can thus reveal a great deal about the competitiveness of an economy. This paper estimates the persistence of profits across the European Union (EU), which adds to our understanding of the competitiveness of 18 EU member states. By using a sample of approximately 4700 firms with 51,000 observations across the time period of 1995–2013, we find differences in the persistence of short-run profits, implying that there are differences in competitiveness across the EU. The Czech Republic and Greece are among the countries with the highest profit persistence, whereas the United Kingdom is among those with the lowest persistence of profits. Furthermore, we provide evidence that there are significant permanent rents present in the EU across countries as well as in the different broad sectors across the EU. 

Many European companies use some type of control-enhancing mechanism, such as dual class shares or a pyramid ownership structure. Such mechanisms cause deviations from the one share-one vote principle, allocating more voting rights than cash flow rights to some shares and, in turn, providing the owners of such shares with more influence than what would be warranted by their investment. However, disproportionate influence may also arise in firms without such mechanisms. In this article, we present a method for disentangling disproportionality, which allows us to more precisely test the effects of deviations from the one share-one vote principle. We argue that previous studies suffer from a measurement problem caused by the use of a simplistic notion of disproportionality, and then we show that the effect of control-enhancing mechanisms on firm value has been overestimated in previous studies.

Örebroregionen med Örebro universitet i spetsen har, liksom Sverige i stort, byggt ut kapaciteten inom högre utbildning. Såväl antalet utbildningsplatser som inriktningar har ökat markant under de senaste årtiondena. Tilltron till utbildningens betydelse för den nationella och regionala ekonomiska utvecklingen är också stark. Samtidigt finns det problem med svensk högre utbildning såväl vad gäller kvalitet som innehåll. Arbetsgivare får allt svårare att rekrytera trots en högre andel högutbildade. Hur ser det ut med utbildningsprofiler, kompetensförsörjning och matchning på Örebro arbetsmarknad?

I rapporten Flytt- eller stannfågel – Högre utbildning, dynamik och matchning på Örebro arbetsmarknad ges en analys av hur väl Örebro universitet förser regionen med kompetens. Något som har betydelse för utformningen av universitetsstrategier och valet av utbildningsinriktningar liksom för den regionala konkurrenskraften och den långsiktiga ekonomiska utvecklingen.

This paper puts cities and urban regions at the very centre of the processes of innovation and entrepreneurship. It combines the insights of Jane Jacobs and recent urban research on the role of the city with the literature on innovation and entrepreneurship going back to Joseph Schumpeter. Innovation and entrepreneurship and their geography privileges the firm, industry clusters and/or the individual and poses the city as a container for them. By marrying Jacobs’ insights on cities to those of Schumpeter on innovation, it is argued that innovation and entrepreneurship do not simply take in place in cities but in fact require them.

Our research examines the role of innovation and skill on the level economic segregation across U.S. metro areas. On the one hand, economic and urban theory suggest that more innovative and skilled metros are likely to have higher levels of economic segregation. But on the other hand, theory also suggests that more segregated metros are likely to become less innovative over time. We examine the connection between innovation and economic segregation this via OLS regressions informed by a Principal Component Analysis to distill key variables related to innovation, knowledge and skills, while controlling for other key variables notably population size. Our findings are mixed. While we find evidence of an association between the level of innovation and skill and the level of economic segregation in 2010, we find little evidence of an association between the level of innovation and skill across metros and the growth of economic segregation between 2000 and 2010.

The prevailing geographic model for high-technology industrial organization has been the “nerdistan,” a sprawling, car-oriented suburb organized around office parks. This seems to contradict a basic insight of urban theory, which associates dense urban centers with higher levels of innovation, entrepreneurship, and creativity. This article examines the geography of recent venture capital finance startups across U.S. metros and within a subset of them by neighborhood. It concludes that the model is changing. The suburban model might have been a historical aberration, and innovation, creativity, and entrepreneurship are realigning in the same urban centers that traditionally fostered them.

This study examines the geography of economic segregation in America. Most studies of economic segregation focus on income, but our research develops a new measure of overall economic segregation spanning income, educational, and occupational segregation which we use to examine the economic, social and demographic factors which are associated with economic segregation across US metros. Adding in the two other dimensions of educational and occupational segregation– seems to provide additional, stronger findings with regard to the factors that are associated with economic segregation broadly. Our findings suggest that several key factors are associated with economic segregation. Across the board, economic segregation is associated with larger, denser, more affluent, and more knowledge based metros. Economic segregation is related to race and to income inequality.

This paper examines the geographic variation in wage inequality and income inequality across US metros. The findings indicate that the two are quite different. Wage inequality is closely associated with skills, human capital, technology and metro size, in line with the literature, but these factors are only weakly associated with income inequality. Furthermore, wage inequality explains only 15% of income inequality across metros. Income inequality is more closely associated with unionization, race and poverty. No relationship is found between income inequality and average incomes and only a modest relationship between it and the percentage of high-income households.

Research on talent or human capital generally focuses on the metro level and neglects the relative effects of its distribution between center cities and their surrounding suburbs. This research examines the connection between human capital in urban centers (defined here as principal cities) versus suburbs on the economic performance of US metropolitan areas. The findings indicate that this distribution of human capital has significant connection to metro economic performance, with suburban human capital being more strongly related to performance than human capital in the principal city. This result also varies by metro size.

Firms in local industries maintain their capability to generate new export varieties by simultaneously exploiting internal and external knowledge resources. The paper introduces the notion ‘variety triplet’ to distinguish individual export varieties, where a triplet is a unique combination of a firm, a product code and a destination country. For each date, the set of variety triplets in each local industry records all remaining export varieties introduced in the past. In view of this, the paper examines how internal and external knowledge of local industries influence the industry's scope and value of export varieties. First, the paper contributes by considering a local industry's internal and external knowledge, as well as the conjunction of its internal and external knowledge sources. Second, the knowledge sources are shown to influence both the stock and the dynamics of a local industry's variety triplets, using firm-level data from Sweden.

This paper explores the capacity to produce new knowledge proxied by patents granted in 18 industries in 11 European economies. For each industry in each country, the number of granted U.S. Patent and Trademark Office patents is recorded over the 1991–2005 period. Controlling for research and development, industry composition, and institutional setting, the paper shows that systematic differences in patent intensity exist between the studied countries, such that almost all industries are affected by country-specific conditions, suggesting that the countries’ innovation systems differ in efficiency. The countries with the highest R&D efficiency are Sweden and Finland, followed by the Netherlands and Germany.

This empirical analysis focus on the impact of firm characteristics, firms’ export experiences and location-specific variables on export decisions in Swedish manufacturing firms. Three choices of export market participation are considered: permanent export, occasional export and no export. The paper also analyzes firms’ choice of expanding export activities. The empirical results indicate that firm-level variables such as size, human capital intensity and labor productivity increases the probability of a firm being a permanent exporter rather than an occasional or non-exporter. Moreover, firms located in regions with a high concentration of other firms exporting commodities in the same product group have a higher probability of both permanent and occasional export market participation. The results also show a significant positive effect of firms’ export experiences in the previous period on the probability that a firm becomes a permanent exporter in the current period. The analysis of export market expansion suggest that firms with high human capital intensity and experiences from exporting several products to several markets are more likely to introduce a new export product. The probability of expanding to new geographical markets seems to be increasing with firm-level labor productivity and export experiences from multiple markets in previous periods.

This paper examines the influences of accessibility to R&D on the export diversity in Swedish regions. A theoretical model with fixed R&D cost predicts that spatial knowledge spillovers generate external economies of scale in R&D activities. These external effects are presumed to increase regions' innovative capacity. Moreover, the model implies that the effects of R&D on regional export performance are reflected by the size of the export base rather than by the export volumes. The empirical analysis focuses on three different indicators of export diversity: the number of exported goods, the number of exporting firms and the number of export destinations. The hypothesis that regional accessibility to R&D facilities in the private business sector, on the one hand, and university research departments on the other hand, increases the export diversity in regions is tested in a spatial cross-regressive model. Since knowledge cannot be regarded as a spatially trapped resource the empirical analysis includes two measures of R&D accessibility: intra-regional and inter-regional. The empirical results indicate that the three indicators of regional export diversity are positively affected by the intra-regional accessibility to company R&D in commodity groups that have a relatively high R&D-intensity in production. Inter-regional accessibility to company R&D has significant positive impacts on the number of export goods and the number of export destinations also in less R&D-intensive industries. In the case of university R&D, the empirical results are weaker, in particular in the case of intra-regional accessibility. Yet, the inter-regional accessibility to university R&D has a significant positive impact on the number of export goods and the number of export destinations in the majority of commodity groups.

This study explore the location pattern of gourmet restaurants in Sweden by using information about restaurant quality from the White Guide. The purpose of the paper is to analyze which factors that influence the location pattern of gourmet restaurants, with particular focus on the influence of small-scale food producers. This variable can be expected to be of substantial importance in creating comparative advantages related to geographical location. Econometric estimates of a zero-inflated Poisson regression show that the number of small-scale food producers in a location significantly increases the number of gourmet restaurants in locations with non-zero count. Moreover, factors related to the demand side, such as market size and tourism significantly increases the number of gourmet restaurants in a municipality once the probability of a non-zero count is accounted for. The tourism sector appears to be of particular strong importance in rural areas where the size of the permanently residing population is insufficient for creating business opportunities for restaurateurs striving for the upper quality segment.

Today we can observe an increasing spatial divide as some large urban regions and many more medium-sized and small regions face growing problems such as decreasing labour demand, increasing unemployment and an ageing population. In view of these trends, this book offers a better understanding of the general characteristics and specific drivers of the geographies of growth. It shows how these may vary in different spatial contexts, how hurdles and barriers to growth in different types of regions can be dealt with, how and to what extent resources in different areas can develop and how the potential of these resources to stimulate growth can be realized. This book presents a collection of chapters, divided into four main parts, that together deal with these issues. The expert contributions provide numerous different perspectives on a new regional divide as well as exploring the inter-regional accessibility to human capital and its effects on productivity on both sides of the border. The book also investigates the speed of convergence and the fact that, when incorporating structural change, it is often quicker at the regional level compared to both the country and industry level. Other topics covered include institutional foundations and their influence on local social acceptance of entrepreneurship, the role of global value chains on bilateral trade and the determinants of cross-border innovation cooperation focusing on partner selection and location. Students, researchers and scholars will find this an important resource that fills numerous knowledge gaps and opens new avenues for research. It will also appeal to consultants, practitioners and planners at the international, regional and local level. Today we can observe an increasing spatial divide as some large urban regions and many more medium-sized and small regions face growing problems such as decreasing labour demand, increasing unemployment and an ageing population. In view of these trends, this book offers a better understanding of the general characteristics and specific drivers of the geographies of growth. It shows how these may vary in different spatial contexts, how hurdles and barriers to growth in different types of regions can be dealt with, how and to what extent resources in different areas can develop and how the potential of these resources to stimulate growth can be realized. This book presents a collection of chapters, divided into four main parts, that together deal with these issues. The expert contributions provide numerous different perspectives on a new regional divide as well as exploring the inter-regional accessibility to human capital and its effects on productivity on both sides of the border. The book also investigates the speed of convergence and the fact that, when incorporating structural change, it is often quicker at the regional level compared to both the country and industry level. Other topics covered include institutional foundations and their influence on local social acceptance of entrepreneurship, the role of global value chains on bilateral trade and the determinants of cross-border innovation cooperation focusing on partner selection and location. Students, researchers and scholars will find this an important resource that fills numerous knowledge gaps and opens new avenues for research. It will also appeal to consultants, practitioners and planners at the international, regional and local level.

The main purpose of this Handbook is to provide overviews and assessments of the state-of-the-art regarding research methods, approaches and applications central to economic geography. The chapters are written by distinguished researchers from a variety of scholarly traditions and with a background in different academic disciplines including economics, economic, human and cultural geography, and economic history. The resulting handbook covers a broad spectrum of methodologies and approaches applicable in analyses pertaining to the geography of economic activities and economic outcomes.

In recent decades we have been able to witness a veritable revolution in the world economy, with dramatic changes in the competitiveness of nations, regions and companies. The most commonly used term to describe this revolution has been ‘globalization’, even if there is no common definition of this term in the literature. In fact, all definitions of globalization are elusive and elicit criticism (Thurik et al., 2013). Generally, the term is connected with the rapid increase in the free movement of goods, capital, people, ideas, information and knowledge around the globe. The shift of economic activities between regions in different national spheres ranks among the most vigorous changes shaping the economic landscape of today (Dreher et al., 2008). Much of the discussion about globalization has been held at a rather superficial macroeconomic level. Discussions at the meso- and microeconomic level, that is, the level of regions and companies, have been much less common, and many have also been biased in the sense that they have only given a partial picture. One obvious example is that discussions on the role of innovation and entrepreneurship have tended to use a narrow definition of entrepreneurship as the start-up of new companies; as a result they have ignored the high degree of innovation and entrepreneurship within many incumbent companies. This is problematic, since innovation and entrepreneurship, generating new technologies, new products and new production processes, are at the core of economic development and growth (Hall, 1999).

In this paper, we first present how one can create functional economic regions. Then, we elaborate on the economic activity and spatial interaction, which forms functional regions, and the development of the system of functional regions. Our presentation shows that the economy is structured in functional regions, and hence it is important to use functional regions in economic studies, in order to produce correct results, and for regional policy, in order for the policy to be effective. We observe, that the often used NUTS-regions are very large compared to the functional regions. We argue, therefore, that the use of NUTS-regions ought to be replaced by the use of functional regions. This would lead to more reliable results and better policy outcomes.

This paper analyzes the effect of various innovation strategies of firms on their future performance, captured by labour productivity. Using five waves of the Community Innovation Survey in Sweden, we have traced the innovative behaviour of firms over a decade, i.e. from 2002 to 2012. We distinguish between sixteen innovation strategies, which compose of Schumpeterian four types of innovations, i.e. process, product, marketing, and organizational (simple innovation strategies) plus various combinations of these four types (complex innovation strategies). The main findings indicate that those firms that choose and afford to have a complex innovation strategy are better off in terms of their future productivity in compare with both those firms that choose not to innovative (base group) and those firms that choose simple innovation strategies. Moreover, not all types of complex innovation strategies affect the future productivity significantly; rather, there are only few of them. This necessitates a purposeful choice of innovation strategy for firms.

Urbanization and new digital technologies have significantly altered the news media industry. One major change is the disappearance of local editorial offices in many regions. This paper examines if there is a relation between access to local media in terms of editorial offices and journalists, and the likelihood of the public consuming local news. The study builds on fine level data for Sweden in 2006 and in 2013, allowing for a comparison of trends. Our results suggest that the existence of an editorial office in the municipality is not significantly related to the consumption of local newspapers but that accessibility to employed journalists who live in the municipality is.

We examine the combined effect of exports, innovation and external knowledge on total factor productivity growth among manufacturing firms. This paper distinguishes between frequent and temporary exporters as well as between frequent and temporary innovators. Applying a dynamic approach on an unbalanced panel consisting of 8516 Swedish firms observed over a 12-year period, the results show that among firms with permanent presence in export markets, persistent innovators have 0.5% point higher annual productivity growth than non-innovative exporters and 0.4% higher growth compared to firms that switch between being innovative or not. A similar pattern is found for the group of companies that alternates between exporting and non-exporting; however, the differences in growth rates are not statistically significant. We also show that only persistently innovative exporters and exporters with a large fraction of exports in their sales benefit from their presence in the local milieu with high knowledge intensity.

Purpose

– This paper aims to marry Michael Porter’s industrial cluster theory of traded and local clusters to Richard Florida’s occupational approach of creative and routine workers to gain a better understanding of the process of economic development.

Design/methodology/approach

– Combining these two approaches, four major industrial-occupational categories are identified. The shares of US employment in each – creative-in-traded, creative-in-local, routine-in-traded and routine-in-local – are calculated, and a correlation analysis is used to examine the relationship of each to regional economic development indicators.

Findings

– Economic growth and development is positively related to employment in the creative-in-traded category. While metros with a higher share of creative-in-traded employment enjoy higher wages and incomes overall, these benefits are not experienced by all worker categories. The share of creative-in-traded employment is also positively and significantly associated with higher inequality. After accounting for higher median housing costs, routine workers in both traded and local industries are found to be relatively worse off in metros with high shares of creative-in-traded employment, on average.

Social implications

– This work points to the imperative for the US Government and industry to upgrade routine jobs, which make up the majority of all employment, by increasing the creative content of this work.

Originality/value

– The research is among the first to systematically marry the industry and occupational approaches to clusters and economic development.

Much research has suggested that night-time light (NTL) can be used as a proxy for a number of variables, including urbanization, density, and economic growth. As governments around the world either collect census data infrequently or are scaling back the amount of detail collected, alternate sources of population and economic information like NTL are being considered. But, just how close is the statistical relationship between NTL and economic activity at a fine-grained geographical level? This paper uses a combination of correlation analysis and geographically weighted regressions in order to examine if light can function as a proxy for economic activities at a finer level. We use a fine-grained geo-coded residential and industrial full sample micro-data set for Sweden, and match it with both radiance and saturated light emissions. We find that the correlation between NTL and economic activity is strong enough to make it a relatively good proxy for population and establishment density, but the correlation is weaker in relation to wages. In general, we find a stronger relation between light and density values, than with light and total values. We also find a closer connection between radiance light and economic activity, than with saturated light. Further, we find the link between light and economic activity, especially estimated by wages, to be slightly overestimated in large urban areas and underestimated in rural areas.

Distinguishing neighbourhood and workplace network effects on individual income: evidence from Sweden. Regional Studies. This paper investigates the effects on individuals’ income of two social networks in which individuals are embedded: their residential neighbourhood and their workplace. The paper avails itself of Swedish micro-level data, which make it possible to identify individual workers, and with whom they live next to and work. The spatial extent of the non-workplace social network – from block group to the whole of a metropolitan area – is varied to examine which social community most affects an individual’s income. The paper distinguishes between individuals engaged in high- and low-skilled occupations so as to starkly control for differences in education, training and skills. The results suggest that residential neighbourhoods do matter for individuals’ income, although the effect is stronger for low-skilled individuals. For both high- and low-skilled individuals, their workplace group skill has the greatest effect on income, but the effect is negative for high-skilled and positive for low-skilled individuals.