Employment growth and regional development: industrial change and contextual differences between Denmark and Sweden

This paper explores the potential drivers behind uneven regional development in the context of employment growth in Denmark and Sweden. In particular, we are interested in the roles of urbanization, industrial change and the rise of the new economy as manifested in the growth of the two economies in 2002–2007. The aim of this paper is, therefore, to analyse the impact of a number of key industrial sectors on regional employment growth in the two countries. The empirical analysis is based on longitudinal matched employer–employee data retrieved from official registers in each economy from 2002 to 2007, a period of strong national growth following the crisis of early 2000. Our findings indicate that the two economies follow a similar pattern in addressing total employment growth; but looking at changes in employment levels across the national borders of these two relatively similar open economies, we find that, although in general these economies react relatively similarly to changes, embarking on a narrower analysis of the individual sectors reveals marked national differences. This indicates that context matters in the analysis of regional economic dynamics in terms of structure, system and policy.