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How Provincial is your Region? Effects on Labour Productivity and Employment in Europe

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  • Alfonso Gambardella
  • Myriam Mariani
  • Salvatore Torrisi

Abstract

This paper estimates the determinants of labour productivity and employment in European NUTS2 regions. We focus on technological capabilities (proxied by regional patents), agglomeration economies (employment density), and openness, proxied by the number of airplane passengers embarked and disembarked in the region. We employ 1989-1996 data drawn from the Eurostat REGIO data base. By using instrumental variables, we confirm existing results in the literature that patents and employment density affect labour productivity. Our novel finding is that openness affects labour productivity as well. This suggests that regional advantages also stem from the ability of the regions to connect to the world that is outside them, and not just on internal factors like local infrastructures, local networks, etc.. In addition, we find that technological capabilities affect employment, while the effect of agglomeration economies and openness on the latter is less marked. Thus, technology seems to be the crucial variable for a thorough regional development. Agglomeration economies and openness benefit mostly those who are already employed, as it implies increases in their incomes with limited increases in employment.

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Bibliographic Info

Paper provided by Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy in its series LEM Papers Series with number 2001/04.

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Date of creation: 15 Dec 2001
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Handle: RePEc:ssa:lemwps:2001/04

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  1. Ciccone, Antonio & Hall, Robert E, 1996. "Productivity and the Density of Economic Activity," American Economic Review, American Economic Association, vol. 86(1), pages 54-70, March.
  2. Stephen Redding & Anthony J. Venables, 2001. "Economic geography and international inequality," LSE Research Online Documents on Economics 3714, London School of Economics and Political Science, LSE Library.
  3. Raffaele Paci & Stefano Usai, 1998. "Technological enclaves and industrial districts: An analysis of the regional distribution of innovative activity in Europe," ERSA conference papers ersa98p461, European Regional Science Association.
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  6. Puga, Diego, 1997. "The Rise and Fall of Regional Inequalities," CEPR Discussion Papers 1575, C.E.P.R. Discussion Papers.
  7. Henry G. Overman & Stephen Redding & Anthony J. Venables, 2001. "The economic geography of trade, production, and income: a survey of empirics," LSE Research Online Documents on Economics 3712, London School of Economics and Political Science, LSE Library.
  8. Adam B. Jaffe & Manuel Trajtenberg & Rebecca Henderson, 1992. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," NBER Working Papers 3993, National Bureau of Economic Research, Inc.
  9. Antonio Ciccone, 1998. "Agglomeration-effects in Europe," Economics Working Papers 499, Department of Economics and Business, Universitat Pompeu Fabra, revised Aug 1999.
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  14. Bresnahan, Timothy F & Gambardella, Alfonso & Saxenian, AnnaLee, 2001. "'Old Economy' Inputs for 'New Economy' Outcomes: Cluster Formation in the New Silicon Valleys," Industrial and Corporate Change, Oxford University Press, vol. 10(4), pages 835-60, December.
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Cited by:
  1. Giorgio Fagiolo & Gianluca Santoni, 2014. "Human-Mobility Networks, Country Income, and Labor Productivity," LEM Papers Series 2014/08, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
  2. Nune Hovhannisyan & Wolfgang Keller, 2011. "International Business Travel: An Engine of Innovation?," NBER Working Papers 17100, National Bureau of Economic Research, Inc.

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