In economic theory, one can distinguish between variety as a source of regional knowledge spillovers, called Jacobs externalities, and variety as a portfolio protecting a region from external shocks. We argue that Jacobs externalities are best measured by related variety (within sectors), while the portfolio argument is better captured by unrelated variety (between sectors). We introduce a methodology based on entropy measures to compute related variety and unrelated variety. Using data at the NUTS-3 level in the Netherlands for the period 1996-2002 we find that Jacobs externalities enhance employment growth, while unrelated variety dampens unemployment growth. Productivity growth can be explained by traditional determinants including investments and R&D expenditures. Implications for regional policy follow.

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Collaboration and the exchange of knowledge are supposedly made easier by geographical proximity because of the tacit character of knowledge. Recently a number of scholars' criticised this view on geographical proximity as being oversimplified and argued that the precise role of geographical proximity for knowledge exchange and collaboration still remains unclear. This paper analyses the role of geographical proximity for collaborative scientific research in science-based technologies between universities, companies and governmental research institutes. We test the hypothesis that the collaboration between different kinds of organisations is more geographically localised than collaboration between organisations that are similar due to institutional proximity. Using data on co-publications, collaborations patterns are analysed and the hypothesis is confirmed. Copyright (c) 2007 the author(s). Journal compilation (c) 2007 RSAI.

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