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This paper examines the effects of related and unrelated variety on total factor productivity (TFP) in Poland. Based on dynamic panel data regression results for Polish regions in 2003-2019, we find the positive effect of related variety and the strong negative effect of unrelated variety on TFP. This implies that regions with high related and low unrelated variety optimize TFP. Using the estimated TFP values, we tested for TFP convergence to the technological frontier using convergence tests that take into account significant differences in technological advancement across regions. We reject TFP convergence for all regions, but we find evidence of regional club convergence. The results of the convergence tests obtained for the simulation variants indicate that changes in related and unrelated variety structures may lead to the formation of convergence clubs with the regional technological leader. Furthermore, the changes primarily in related variety structures lead to the convergence of some regions to the regional technological frontier. [ABSTRACT FROM AUTHOR]

This paper examines the influence of related variety (RV) and unrelated variety (UV) on the basic variables of the labour market, i.e.: employment growth rates, increase in unemployment rates and real gross wages in the regional approach in Poland. The basic difference between the presented and the current research in this area is that the RV and the UV are introduced into the estimation taking into account the basic determinants of the analysed labour market variables resulting from simple economic models. Moreover, an attempt was made to determine the impact of the RV and the UV on real gross wages, which was not covered in the literature. The research was based on panel data for 16 Polish voivodships (NUTS2) and in the group of regions of Western Poland in the years 2004–2017 using SYS-GMM estimator of Dynamic Panel Data Model. In this paper, a significant positive impact of the RV on the rate of employment growth and wages was found, as well as a negative correlation between the RV and the increase in unemployment rates. On the other hand, the UV positively determined the increase in unemployment rates. [ABSTRACT FROM AUTHOR]