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Innovation ingredients, gross domestic product and productivity: A spatial panel analysis of European regions

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  • Cipollina, Maria
  • De Pascale, Gianluigi

Abstract

Economic literature identifies innovation as a primary driver of productivity and GDP, with effects extending across borders via inter-regional spillovers. However, the role of territorial characteristics in shaping this transmission remains under-explored. Using spatial econometric techniques, we evaluate the intra-regional (internal) and inter-regional (external) impacts of European innovation through two approaches: the composite Regional Innovation Scoreboard (RIS) and a disaggregated framework of innovative milieu variables. Our results reveal an asymmetric spatial pattern: the RIS is associated with negative internal effects on productivity and GDP but generates positive spillovers for neighbouring regions. This suggests that local returns may be limited by short-run adjustment costs or absorptive capacity constraints, even as benefits diffuse spatially. These findings emphasise that innovation strategies may not be fully internalised locally, highlighting the necessity for place-sensitive policies that account for spatial dependencies.

Suggested Citation

  • Cipollina, Maria & De Pascale, Gianluigi, 2026. "Innovation ingredients, gross domestic product and productivity: A spatial panel analysis of European regions," Structural Change and Economic Dynamics, Elsevier, vol. 80(C), pages 111-121.
    • Handle: RePEc:eee:streco:v:80:y:2026:i:c:p:111-121
    DOI: 10.1016/j.strueco.2026.07.004
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    Keywords

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    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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