Abstract
Regional growth models leave a large share of variation unexplained. While we should continuously aim to improve these models, the unique combination of conditions and human agency in each region will also invariably lead to region-specific growth trajectories. Theoretically, we should thus expect systematic deviations from growth predictions. We propose an approach to explore these unexplained deviations and to detect regions that perform unexpectedly well or badly in certain periods. We illustrate the approach using data for Sweden from 1990 to 2016. We find systematic patterns of unexplained periodic regional growth deviations outweighing the effect of generic structural factors.
Highlights
In this paper, we discuss a fundamental challenge of one particular form of explaining growth and change of regions and cities: the explanation of regional growth by structural factors in regional growth models
There has been a growing literature on human agency in regional development. This literature brings forward a complementary argument: regions may develop differently because of unique combinations of various conditions and relations at different scales, and because of the emerging character of regional development shaped by the intended and unintended consequences of decisions, strategies, and actions of various actors and actor groups (Dawley 2014; Garud and Karnøe 2003; Simmie 2012)
While regional development research has traditionally mainly been preoccupied with identifying regularities explaining growth across regions, this paper turns the attention to the outliers in regional growth regressions
Summary
We discuss a fundamental challenge of one particular form of explaining growth and change of regions and cities: the explanation of regional growth by structural factors in regional growth models. This brings about an important task of distinguishing between the principal regularities in urban and regional growth and the events and processes that are not temporally or geographically regular but that affect pathways of development in durable ways (Storper 2011) This resonates with evolutionary and institutional economic geography, where path-dependent processes may lead to a wide variety of regional trajectories (Boschma 2004). We find that the residuals are large and often systematic, which challenges current thinking as it calls for (i) including additional important variables, such as institutions (e.g. Rodríguez-Pose 2020), (ii) improving econometric models, or (iii) acknowledging the possibility of region-specific growth paths caused by the interplay of multiple regional and extra-regional factors
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