Business centre or bedroom community? The development of employment in small and medium-sized towns

This study scrutinizes the development of employment towards business centres or bedroom communities in Swiss small and medium-sized towns (SMSTs). It analyzes an original data set of all 152 SMSTs in Switzerland. Bayesian multilevel and spatial regression techniques examine regional and local explanatory factors affecting the development of employment. Evidence is found for employment growth if an SMST is embedded in a dynamic network, meaning that employment growth in neighbouring cities and towns creates spillover effects for SMSTs. Thus, if local administrations want to influence their employment structure, they are well advised to engage in regional economic policy-making.