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FACTOR ACCUMULATION, EXTERNALITIES, AND ABSORPTIVE CAPACITY IN REGIONAL GROWTH: EVIDENCE FROM EUROPE
Author(s) -
Jung Juan,
LópezBazo Enrique
Publication year - 2017
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.12304
Subject(s) - absorptive capacity , lagging , externality , economics , total factor productivity , economic geography , productivity , capital (architecture) , human capital , sample (material) , international economics , macroeconomics , market economy , industrial organization , microeconomics , geography , medicine , chemistry , archaeology , pathology , chromatography
This paper proposes a model that incorporates capital accumulation and spatial spillovers across economies, while allowing for regional differences in absorptive capacity. This model is estimated using a sample of EU regions, over a period including the enlargement of the single‐market area in the middle of the first decade of the 21st century. Results confirm the relevance of local absorptive capacity that is directly linked with the process of making the most of externalities. Capital deepening reduced the role of capital in explaining the regional productivity gap, but was not enough to help lagging regions to equal the return to human capital investments reached by most advanced regions.