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“Factor Accumulation, Externalities and Absorptive Capacity in Regional Growth: Evidence from Europe”

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  • Juan Jung

    () (Faculty of Economics, University of Barcelona)

  • Enrique López-Bazo

    () (Faculty of Economics, University of Barcelona)

Abstract

This paper proposes a model which incorporates capital accumulation and spatial spillovers across economies, while allowing for regional differences in absorptive abilities. This model is estimated using a sample of 215 European NUTS2 regions, before and after the 2004 enlargement of the single??market area. Results confirm the relevance of local absorptive capacities, as are found to be directly linked with the process of making the most of externalities. More than that, capital accumulation externalities do not seem to take place in absence of local capabilities. The process of capital deepening which took place in the period reduced the role of capital in explaining the productivity gap among regions, but so far has not been enough to help lagging regions to equal the return to human capital investments reached by most advanced regions.

Suggested Citation

  • Juan Jung & Enrique López-Bazo, 2014. "“Factor Accumulation, Externalities and Absorptive Capacity in Regional Growth: Evidence from Europe”," AQR Working Papers 201409, University of Barcelona, Regional Quantitative Analysis Group, revised May 2014.
  • Handle: RePEc:aqr:wpaper:201409
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    References listed on IDEAS

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    Keywords

    Regional Disparities; Absorptive Capacity; Technological Interdependence; Spatial Econometrics. JEL classification: C21; O10; R11;

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