Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/123114
Authors: 
Kluge, Jan
Year of Publication: 
2015
Series/Report no.: 
Ifo Working Paper 206
Abstract: 
This paper examines the extent to which sectoral diversification can act as an insurancemechanism against fluctuations in regional gross value added growth rates. I apply portfoliotheory to the growth-instability properties of German districts. Furthermore, Idefine a comprehensive diversification measure and use Stochastic Frontier Analysis inorder to estimate whether diversification allows regions to achieve more efficientgrowth-instability combinations, i.e., greater stability at given levels of economicgrowth. The results confirm that diversification does generate such effects. Spatialinteractions do also play a role: The effects are less pronounced for regions whoseeconomic performance is mainly driven by the surrounding regions.
Subjects: 
Sectoral diversification
regional growth
economic instability
JEL: 
L16
R11
R58
Document Type: 
Working Paper

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