Regional Competitiveness: Theories and Methodologies for Empirical Analysis

Abstract

A significant forum of scholarly and practitioner-based research has developed in recent years that has sought both to theorize upon and empirically measure the competitiveness of regions. However, the disparate and fragmented nature of this work has led to the lack of a substantive theoretical foundation underpinning the various analyses and measurement methodologies employed. The aim of this paper is to place the regional competitiveness discourse within the context of theories of economic growth, and more particularly, those concerning regional economic growth. It is argued that regional competitiveness models are usually implicitly constructed in the lineage of endogenous growth frameworks, whereby deliberate investments in factors such as human capital and knowledge are considered to be key drivers of growth differentials. This leads to the suggestion that regional competitiveness can be usefully defined as the capacity and capability of regions to achieve economic growth relative to other regions at a similar overall stage of economic development, which will usually be within their own nation or continental bloc. The paper further assesses future avenues for theoretical and methodological exploration, highlighting the role of institutions, resilience and, well-being in understanding how the competitiveness of regions influences their long-term evolution.

Keywords: competitiveness, regions, economic growth, knowledge, innovation

JEL Classification: O18, O38, P51, R58