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PRODUCTIVITY GROWTH IN THE OLD AND NEW EUROPE: THE ROLE OF AGGLOMERATION EXTERNALITIES
Author(s) -
Marrocu Emanuela,
Paci Raffaele,
Usai Stefano
Publication year - 2013
Publication title -
journal of regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.171
H-Index - 79
eISSN - 1467-9787
pISSN - 0022-4146
DOI - 10.1111/jors.12000
Subject(s) - economies of agglomeration , economic geography , externality , productivity , human capital , diversity (politics) , economics , econometric analysis , growth theory , economic growth , macroeconomics , microeconomics , political science , neoclassical economics , law
As Europe is currently characterized by huge disparities in the economic performance of “old” and “new” states, we investigate whether this is the result of local agglomeration—specialization and diversity—externalities. Our spatial econometric analysis focuses on total factor productivity dynamics over the period 1996–2007 for 13 industries located in 276 European regions. Consistently with the “nursery cities” theory, we find that diversity exerts a positive effect in the knowledge‐intensive services of the “old” Europe urban areas, while specialization is still effective in the “new” Europe low‐tech manufacturing. Human and technological capital has also a positive impact.