eu regional policy effectiveness and the role of territorial capital

The present chapter reviews the recent studies of the group of regional and urban economics on the impact of the European Union regional policy on regional development. In particular, the focus of the research program is on the identification of the mechanisms through which the local territorial characteristics mediate the effect of public investments. Results show a strong relationship between the territorial capital of regions and the effectiveness of the EU regional policy. This evidence conveys relevant implications for policy makers. In particular, it suggests that regions should invest in those assets that are complementary to the ones which they already have, in order to build a balanced economic system

The Effects of Absorptive Capacity on Innovation Performance: A Cross-Country Perspective

This paper has two objectives: the construction of enterprise‐level estimates of absorptive capacity to allow comparison of absorptive capacity levels across Europe and the analysis of whether the effects of absorptive capacity on R&D and innovation vary across countries. The dataset is the Community Innovation Survey which provides information on the innovation activities of enterprises across Europe. Estimates of absorptive capacity are generated using a structural equation model that considers absorptive capacity to be a latent variable that predicts the use of information sources and cooperation partners for innovation activities. The effects of absorptive capacity are estimated econometrically using probit models. The results show that absorptive capacity levels vary substantially across European countries with Western European enterprises (particularly those in Germany) generally having higher absorptive capacity than Eastern European enterprises (especially Romanian enterprises). The effects of absorptive capacity on R&D and innovation are uniformly positive but also demonstrate substantial heterogeneity across countries. This has important implications for policy as it suggests that, not only should government aim to enhance levels of absorptive capacity but it should also attempt to enhance the value of external knowledge available for enterprises to exploit