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Journal of Economic Geography Advance Access published online on October 17, 2008
Journal of Economic Geography, doi:10.1093/jeg/lbn041
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© The Author (2008). Published by Oxford University Press. All rights reserved. For Permissions, please email: journals.permissions@oxfordjournals.org

How does labour mobility affect the performance of plants? The importance of relatedness and geographical proximity

Ron Boschma*, Rikard Eriksson** and Urban Lindgren**

**Department of Social and Economic Geography, Umeå University, SE-907 87, Umeå, Sweden.email: <rikard.eriksson{at}geography.umu.se>

*Corresponding author: Department of Economic Geography, Utrecht University, NL-3508 TC, Utrecht, The Netherlands. email: <r.boschma{at}geo.uu.nl>

JEL classifications: R11, R12, O18

This article analyses the impact of skill portfolios and labour mobility on plant performance by means of a unique database that connects attributes of individuals to features of plants for the whole Swedish economy. We found that a portfolio of related competences at the plant level increases significantly productivity growth of plants, in contrast to plant portfolios consisting of either similar or unrelated competences. Based on the analysis of 101,093 job moves, we found that inflows of skills that are related to the existing knowledge base of the plant had a positive effect on plant performance, while the inflow of new employees with skills that are already present in the plant had a negative impact. Our analyses also show that geographical proximity influences the effect of different skill inflows. Inflows of unrelated skills only contribute positively to plant performance when these are recruited in the same region. Labour mobility across regions only has a positive effect on productivity growth of plants when this concerns new employees with related skills.

Keywords: labour mobility, related variety, skill portfolio, plant performance, geographical proximity
Date submitted: 1 May 2008     Date accepted: 22 September 2008


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