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Abstract:
In this paper we study two closely related issues. First, the role of technology heterogeneity and diffusion in the convergence of GDP per worker observed across the European regions, in the absence of data on regional TFP. Second, the spatial pattern of the observed regional heterogeneity in technology and the relevance of this pattern for the econometric analysis of regional convergence in Europe. As for the first issue, our aim is to assess whether the convergence observed across European regions is due to convergence in technology as well as to convergence in capital-labour ratios. We first develop a growth model where technology accumulation in lagging regions depends on their own propensity to innovate and on technology diffusion from the leading region, and convergence in GDP per worker is due to both capital deepening and catch-up. We use data (1978-97) on 131 European regions. Propensities to innovate are computed by assigning each patent collected by the European Patent Office to its region of origin. Our findings are consistent with the hypothesis that technology differs across regions and that convergence is partly due to technological catch-up. As for the second empirical issue, we study to what extent each region's propensity to innovate is correlated with that of the surrounding regions. Our results show, first, that the performance of each region does depend on that of the surrounding areas. Second, that the intensity of such spillovers fades with distance. Taken together, these findings suggest the existence of significant localised spillovers of technological knowledge. Finally, we show that these spillovers are strong enough to play a role that cannot be ignored in the econometric analysis of the convergence process in Europe.

Convergence, growth, technology diffusion, spatial spillovers, Europe

Abstract:
In this paper a complete set of estimates of long-run production functions for 20 regions and 17 sectors in Italy is provided over the period 1970-1994. Our approach features two important aspects. First, this paper represents the first attempt to provide such a comprehensive set of estimates for the Italian economy. Moreover, we allow the estimated production functions for heterogeneity across sectors and regions. This is particularly appropriate when analysing the Italian economy since the Italian regions have been experiencing fairly different and, in certain cases, divergent development paths. Secondly, on the basis of specific panel tests, we show that there is a considerable empirical evidence which suggests the presence of unit roots in our series; therefore, we apply panel cointegration tests to guard against the spurious regression problem and to detect long-run relationships. Evidence of long run relationships is found for most of the regions and the sectors on the basis of the cointegration tests; thus, the problem of spurious regressions is ruled out allowing us to offer rigorous inference on the estimation of regional production functions. The technological levels of the northern regions result much higher than the southern ones, confirming the persistency of the North - South dualism in the Italian economy. Moreover, we find that factor elasticities highly differ across regions and sectors. This is an important result since most previous studies by employing unique national elasticities introduce a serious bias in the productivity comparisons.

total factor productivity, regional gap, panel unit root test, panel cointegration test, Italy

Abstract:
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).

Abstract:
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 labor productivity. Further, contrary to previous evidence on the United States, our data show a significant link between the specialization in innovation and in production both at the country and at the industry level. This suggests that localized knowledge spillovers and agglomeration economies foster a local economic system towards a specialization 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 characterized by a higher productivity level. This outcome may suggest the presence of positive inter-industry externalities that favor those regions which succeed in covering a broader range of technological activities.

Abstract:
The recent resurgence of growth studies has indicated technological activities and knowledge spillovers as one of the most important factors in determining the performance of the economic systems. However, only few empirical studies have tried to analyse the flows of technology across regional economies due to the lack of adequate indicators.

In this paper we propose new evidence on the characteristics of knowledge spillovers across the European regions based on a database on patents citations developed at the NBER. The data refers to patents granted by the US patent office to European firms over the period 1978-1997. First, we have assigned each patent to 147 European regions according to the place of residence of the first inventor. Then, we have examined in- and out-flows of patent citations as proxy of knowledge spillovers. In order to asses both the spatial and network characteristics of these flows we have tried to combine methodological instruments developed within the Social Network Analysis and the Geographical Information Systems.

Our analysis shows the huge differences that exist among high tech and traditional sectors in the complexity of technological networks and in the geographical distribution of knowledge flows.

patent citations, technological networks, knowledge spillovers

Abstract:
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.

Innovative activity, spatial analysis, european regions, knowledge production function

Abstract:
Many recent studies on EMU have found business cycle asymmetries among potential members of the union to be quite relevant. Such asymmetries clearly decrease the balance of benefits versus costs for potential members of a monetary union and may also raise doubts on the feasibility of a common monetary policy. In response to some of these doubts, we point out that asymmetries in the business cycle are not exogenous to the institutional context of the economy. They are instead likely to be influenced, among other factors, by the decision to participate in an economic and monetary union. In this paper we investigate whether asymmetric shocks to output are less important for industries which are more open to trade and more technology-intensive. Our results, obtained from a correlation analysis between growth rates of value added in thirteen manufacturing industries in eleven European countries between 1979 and 1990, clearly support the hypothesis. This finding suggests that an institutional environment (such as a monetary union) which is likely to further increase trade and technological innovation and diffusion among its members may help to decrease the importance of the asymmetric components of the business cycle.

Abstract:
This paper investigates on the role played by public capital in increasing the productivity levels in Italy. For the construction of the regional series for the public capital stock over the period 1996-2003, the study benefits from the use of the rich dataset on public expenditure, recently published by the Italian Ministry of Economy. We have estimated panel production functions with the inclusion of traditional factors and also intangible inputs like R&D expenditure, human capital and social capital. The results point out that public capital has a positive and significant effect on production. Moreover, the effects of all production factors vary considerably between the two macro-areas of the country, namely Centre-North and Mezzogiorno. More specifically, while private capital is more effective in the South, labour and public capital exhibits an elasticity much higher in the Centre-North with respect to the Mezzogiorno. The disaggregation of the public capital stock into functional categories indicates a significant different impact in the two macro-areas. In addition, when the analysis is carried out by distinguishing among government levels it turns out that the decentralized administrative bodies are much less efficient in the South in delivering public expenditure.

public capital, production function, regional disparities, Italy

Abstract:
This paper aims at assessing whether dualistic mechanisms represent a significant component of the aggregate labor productivity convergence observed across the European regions in the 1980s. The potential of an explanation of convergence based in part, at least, on the existence of dualism in some of the initially poorer regions has been largely ignored by the literature. We use a dualistic model based on Dixit (1970) and on Mas-Colell and Razin (1973) to obtain hypotheses to be tested in cross-region growth regressions. In particular, we wish to test whether a high initial allocation of labor in agriculture in fact generates--in each sector as well as at the aggregate level--the specific impact on productivity growth (and therefore on convergence) implied by the theory of the dual economy. We use the database Regio-Eu set up by CRENoS, with aggregate and sectoral data for 109 territorial units from 1980 to 1990. Our cross-section results are consistent with the major predictions of the dualistic model. While part of the influence exerted by dualistic mechanisms is not easily distinguishable from the one exerted by other mechanisms such as technology diffusion, still the former appears to be a significant component of the whole process of convergence. Ignoring such components could lead to misleading interpretations of the relative roles played by each of the forces behind the process and to inexact assessments of what actions should be taken, if any, by the European regional policy to help the process become more pervasive.

Abstract:
In the last decade there has been an upsurge of studies on international comparisons of Total Factor Productivity (TFP). The empirical evidence suggests that countries and regions differ not only in traditional factor endowments (labour and physical capital) but mainly in productivity and technology. Therefore, a crucial issue is the analysis of the determinants of such differences in the efficiency levels across economies. In this paper we try to assess these issues by pursuing a twofold aim. First, we derive a regression based measure of regional TFP which have the nice advantage of not imposing a priori restrictions on the inputs elasticities; this is done by estimating a Cobb-Douglas production function relationship for 199 European regions over the period 1985-2006, which includes the traditional inputs as well as a measure of spatial interdependences across regions. Secondly, we investigate the determinants of the TFP levels by analyzing the role played by intangible factors: human capital, social capital and technological capital. It turns out that a large part of TFP differences across the European regions are explained by the disparities in the endowments of such assets. This outcome indicates the importance of policy strategies which aim at increasing the level of knowledge and social capital as stressed by the Lisbon agenda. Estimation is carried out by applying the spatial 2SLS method and the SHAC estimator to account for both heteroskedasticity and spatial autocorrelation.

total factor productivity, human capital, social capitalm technology, Europe

Abstract:
Firms competitive strategy in industrialised countries is increasingly based on activities such as the inventions of new processes and products, the improvements of the employees skill, the creation of a reputation for company’s products. All these actions intend to increase firms economic performances and are labeled as “intangible capital.” The aim of this paper is to evaluate the role of intangible capital on firms productivity in addition to the one played by traditional inputs. Firms productivity may also depend on the socio-economic conditions of the region where the firm is located. Therefore, we also control for the physical endowments of the region (public capital, infrastructures) as well as for several types of intangible assets specific to the region (human, technological and social capital) which operate as positive externalities to the localised firms. In our empirical application we employ a large panel of European companies over the period 2002-2006 belonging to 116 regions of six countries. The estimation results show the positive influence of the internal intangible capital on firms productivity levels and also the crucial role played by the intangible assets at the regional level. These results remark the importance of policies designed to stimulate the accumulation of intangible capital stocks internal to the firms through appropriate fiscal policies and to create a favourable external environment based on high endowments of human, social and technological capital.

productivity, intangible capital, local externalities, European regions

Abstract:
It is well known that firms productivity is influenced by information spillovers generated either by other firms located nearby or by direct contacts with final demand or by foreign demand in the case of traded products. In this paper we investigate a new channel of efficiency - enhancing information spillovers: tourism flows. The idea is that tourists, in general, have preferences for high quality goods and differentiated products which are revealed when they buy local products in the tourism destinations, thus transmitting relevant information to the local firms. The latter, in turn, exploit this new information generating a positive impact on the efficiency level of the local economy. More specifically we examine the effects of tourist flows on regional total factor productivity, within a spatial dynamic model, controlling also for other intangible factors (such as human, social and technological capital) and for the degree of accessibility. We apply the analysis to 199 European regions belonging to the EU15 member countries, plus Switzerland and Norway. The econometric results show the positive impact of tourism flows on regional efficiency levels together with the positive role played by intangible assets, infrastructures and spatial spillovers.

Abstract:
This paper explores the spatial distribution of innovative activity and the role of technological spillovers in the process of knowledge creation and diffusion across 175 regions of seventeen countries in Europe (the fifteen members of the pre-2004 European Union plus Switzerland and Norway). The analysis is based on a databank set up by CRENoS on regional patenting at the European Patent Office, spanning 1978 – 2001 and classified by ISIC sectors. The first step is an exploratory spatial data analysis of the dissemination of innovative activity in Europe. The goal of the rest of the paper is to analyse to what extent externalities that cross regional boundaries can explain the spatial association process detected in the distribution of innovative activity in the European regions. The framework given by the knowledge-production function together with the use of spatial econometrics techniques allow us to look for insights on the mechanics of knowledge interdependences across regions, which are shown to exist. Empirical results point to the relevance of internal regional factors (R&D expenditure and agglomeration economies). Moreover, the production of knowledge appears also to be affected by spatial spillovers due to innovative activity (both patenting and R&D) performed in other regions. Additional results show that spillovers are mostly constrained by national borders within less than 250 km, and that technological similarity between regions also matters.(Publication abstract)

European Patent Union, Spillover effects, Technological spillovers, Diffusion of innovations, Information dissemination, Innovation process, Knowledge production, Location factors, R&D, Technology transfer