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Journal of Economic Geography Advance Access originally published online on December 4, 2007
Journal of Economic Geography 2008 8(2):181-209; doi:10.1093/jeg/lbm041
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© The Author (2007). Published by Oxford University Press. All rights reserved. For Permissions, please email: journals.permissions@oxfordjournals.org

The effect of congestion and agglomeration on multifactor productivity growth in Dutch regions

Lourens Broersma*,,{dagger} and Jouke van Dijk**

{dagger}Corresponding author: University of Groningen, Faculty of Economics and Business, P.O. Box 800, NL-9700 AV Groningen, The Netherlands. email < l.broersma{at}rug.nl>
*University of Groningen, Faculty of Economics and Business, Faculty of Spatial Sciences, Groningen Growth and Development Centre, P.O. Box 800, NL-9700 AV Groningen, The Netherlands.
**University of Groningen, Faculty of Spatial Sciences, P.O. Box 800, NL-9700 AV Groningen, The Netherlands. email < jouke.van.dijk{at}rug.nl>

JEL classifications: O40, O47, R10, R11

It is well known that labour productivity growth in Europe is slowing down, against an increasing growth rate in the US. The Netherlands is one of the countries in Europe with the lowest growth rates of productivity. This article looks at this phenomenon from a regional perspective and presents the results of a growth accounting exercise applied to regional industry data of The Netherlands between 1995 and 2002. We find that slow productivity growth in The Netherlands is particularly situated in the economic core regions and is caused by slow multifactor productivity (mfp) growth. A substantial part of this slow mfp-growth can be explained by the fact that positive agglomeration advantages are overruled by negative congestion effects caused by traffic jams.

Keywords: regional growth accounting, labour productivity growth, mfp-growth, agglomeration effects
Date submitted: 1 June 2007     Date accepted: 2 October 2007


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