The Effects of Related and Unrelated Variety on Firm Performance in Norway
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This Master thesis addresses the question whether the co-location of economic sectors increases ﬁrm performances in that region. The empirical study is based on the theoretical concepts of related and unrelated variety. Using a ﬁrm level panel data set covering more than 280.000 Norwegian enterprises and a time span of 10 years, I apply random and ﬁxed eﬀects models. The main ﬁnding is that related variety has a positive eﬀect on regional ﬁrm performance. On the other hand, no evidence for an eﬀect of unrelated variety can be found. Furthermore, diﬀerent industrial sectors are compared, to show that the degree of variety has a diﬀerently strong eﬀect on diﬀerent industries.
Master's thesis in Business Innovation