TFP convergence across European regions: a comparative spatial dynamics analysis

This paper proposes a fixed-effect panel methodology that enables us to simultaneously take into account both TFP and traditional neoclassical convergence. We analyse a sample of 199 regions in EU15 (plus Norway and Switzerland) between 1985 and 2006 and find the absence of an overall process of TFP convergence as we observe that TFP dispersion is virtually constant across the two sub-periods. This result is proved robust to the use of different estimation procedures such as simple LSDV, spatially corrected LSDV, Kiviet-corrected LSDV, and GMM à la Arellano and Bond. However, we also show that this absence of a strong process of global TFP convergence hides interesting dynamic patterns across regions. These patterns are revealed by the use of recent exploratory spatial data techniques that enable us to obtain a complete picture of the complex EU cross-regions dynamics. We find that, between 1985 and 2006, there has been numerous regional miracles and disasters in terms of TFP performance and that polarization patterns have significantly changed along time. Overall, results seem to suggest that a few TFP leaders are emerging and are distancing themselves from the rest, while the cluster of low TFP regions is increasing

Technological enclaves and industrial districts: An analysis of the regional distribution of innovative activity in Europe

This paper explores the spatial distribution of innovative and productive activity across 109 regions of the European Union, thanks to an original databank on regional patents statistics. The main results worth highlighting are as follows. The technological activity in the EU appears to be highly concentrated, although concentration tends to decline over the eighties. This results from the huge differences between southern and northern Europe. As expected, there is a positive association between the regional distribution of innovative activity and labour productivity. Further, contrary to previous evidence on the United States, our data show a significant link between the specialisation in innovation and in production both at the country and at the industry level. This suggests that localised knowledge spillovers and agglomeration economies foster a local economic system towards a specialisation in both production and technology. More surprisingly there appears a negative correlation between technological concentration and aggregate productivity, that is the European regions which enjoy a more homogeneous distribution of their technological capability across different industrial sectors appear to be also characterised by a higher productivity level. This outcome may suggest the presence of positive inter-industry externalities that favour those regions which succeed in covering a broader range of technological activities.

Spatial spillovers and innovation activity in European regions

This paper explores the spatial distribution of innovative activity and the role of technological spillovers in the process of knowledge creation across 138 regions of 17 countries in Europe (the 15 members of the European Union plus Switzerland and Norway). The analysis is based on an original statistical databank set up by CRENoS on regional patenting at the European Patent Office spanning from 1978 to 1997 and classified by ISIC sectors (3 digit). In a first step, a deep exploratory spatial data analysis of the dissemination of innovative activity in Europe is performed. Some global and local indicators for spatial association are presented, summarising the presence of a dependence process in the distribution of innovative activity for different periods and sectors. Secondly, we attempt to model the behaviour of innovative activity at the regional level on the basis of a knowledge production function. Econometric results points to the relevance of internal factors (R&D expenditure, economic performance, agglomeration economies). Moreover, the production of knowledge by European regions seems to be also affected by spatial spillovers due to innovative activity performed in other regions. Keywords: Innovative activity, Spatial analysis, European regions, Knowledge production function.

Productivity growth in the Old and New Europe: the role of agglomeration externalities

The recent history of Europe is characterized by a dual picture showing the Old and New countries in sharp contrast with respect to their industrial specialisation and economic performance. We aim at analyzing the intertwined performance of regions and industries in New and Old European economies by investigating the effects of local agglomeration externalities (mainly specialisation and diversity externalities) on total factor productivity dynamics. We also analyse the potential influence of regional intangible assets such as human and technological capital. The econometric analysis makes use of spatial econometric techniques to take into account the possibility of cross-border externalities.

The role of specialisation and diversity externalities in the agglomeration of innovative activities

This paper contributes to the analysis of the process of spatial agglomeration of innovative activities by investigating directly its determinants. Our main purpose is to identify the extent to which the degree of industrial specialisation (Marshall externalities) or diversity (Jacobs externalities) in the region may affect the innovative output in a particular local industry. Moreover, we test if any relevant difference arises with respect to the role of diversity in metropolitan areas and in high-tech sectors. The analysis is carried out thanks to an original databank on innovation and production across Italian local labour systems. According to the estimation results there are clear signs of the two types of externalities working simultaneously: Marshall externalities (or localisation economies), associated to industrial specialisation within the sector and also within the science base cluster; and Jacobs externalities (or urbanisation economies), associated to the degree of diversity of both the local districts and the science base cluster. With respect to the industrial diversity at the local district level, however, it is worth noting that it plays a different role depending on the dimension of the local district (whether it is a metropolitan area or not) and on the type of industry (high Vs low tech sectors)

Externalities and local economic growth in manufacturing industries

The growing interest on the economic geography issues has provided new vigour to the research efforts aiming at explaining economic phenomena without neglecting space. In particular several studies have focused on the role of spatially bounded externalities on firms agglomeration processes at the local industry level. This paper has a twofold objective. Firstly, we outline a general eclectic model of local economic growth to provide the theoretical background to guide the econometric analysis. The model includes a general taxonomy of different factors which may explain economic growth in a specific industry and location. Secondly, we assess the role of a large set of potential determinants of the process of local agglomeration of economic activity and we address the issue of spatial association of the local growth processes. We apply our model to the case of Italy making use of a very ample database on socio-economic indicators for 784 Local Labour Systems and 97 manufacturing sectors over the period 1991-96. Our econometric results show that local growth in Italy is not a homogeneous process. On the contrary, it is characterized by significant differences across macro regions with respect to the relevance of the explanatory factors. Among the most important determinants of local industry growth, it is worth mentioning the positive role of the diversity externalities. We also find robust evidence of the negative influence of specialisation externalities on labour dynamics at the local industry level. Moreover, we have assessed the effects of other determinants of local growth like: human capital, social environment and public infrastructures. The analysis of spatial dynamics, carried out for the North-East and Centre-North, shows that at the local industry level there are polarisation phenomena at work and that employment dynamics are self-contained within the boundaries of local labour systems once we have controlled for a large set of local determinants

Agglomeration Economies and Growth in Italian Local Labour Systems 1991-2001

In the recent years a vast body of literature has analysed the role of agglomeration economies on industry location and growth. Such literature has, however, paid not too much attention to the wider scenario where such phenomena are rooted, that of an ongoing process of structural change which is transforming our economies from manufacturing to service ones. The main objective of this paper is to assess the role of a large set of potential determinants of the process of local agglomeration of economic activity distinguishing between manufacturing and service sectors and also to analyse the issue of spatial association of the local growth process. We focus on the case of Italy making use of a very ample database on socio-economic indicators for 784 Local Labour Systems and 34 sectors over the period 1991-2001. Our database covers both the manufacturing and the service sectors so that the whole economic system is considered. Our econometric results show that local growth in Italy is not a homogeneous process. On the contrary, it is characterized by significant differences across macro regions and especially across sectors. Among the most important determinants of local industry growth, it is worth mentioning the positive role of the diversity externalities. We also find robust evidence of the negative influence of specialisation externalities on labour dynamics at the local industry level. Moreover, we have assessed the effects of other determinants of local growth like human capital, social environment and network externalities. Finally, the presence of spatial autocorrelation is detected for the aggregate economy and also in several sectors and therefore dynamic spatial models have been estimated

Technological enclaves and industrial districts. An analysis of the regional distribution of innovative activity in Europe

This paper explores the spatial distribution of innovative and productive activity across 109 regions of the European Union, thanks to an original databank on regional patents statistics. The main results worth highlighting are as follows. The technological activity in the EU appears to be highly concentrated, although concentration tends to decline over the eighties. This results from the huge differences between southern and northern Europe. As expected, there is a positive association between the regional distribution of innovative activity and labour productivity. Further, contrary to previous evidence on the United States, our data show a significant link between the specialisation in innovation and in production both at the country and at the industry level. This suggests that localised knowledge spillovers and agglomeration economies foster a local economic system towards a specialisation in both production and technology. More surprisingly there appears a negative correlation between technological concentration and aggregate productivity, that is the European regions which enjoy a more homogeneous distribution of their technological capability across different industrial sectors appear to be also characterised by a higher productivity level. This outcome may suggest the presence of positive inter-industry externalities that favour those regions which succeed in covering a broader range of technological activities

Externalities, knowledge spillovers and the spatial distribution of innovation

The empirical literature on economic growth has recently devoted increasing attention to the issue of regional disparities. The first part of this paper is devoted to the analysis of the growth process of 110 European regions using an updated version of the database set up by the Centre for North South Economic Research (CRENoS). Applying various statistical tools, it compares the dynamics of both per capita income and labour productivity. The second part of the paper examines more specifically the economic performance of Sardinia, relative to the European regions, and outlines a general interpretation of the economic growth process of this region