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Knowledge assets and regional performance

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  • R. Paci

    ()

  • E. Marrocu

    ()

Abstract

Regional competitiveness, especially in the industrialised countries, is increasingly reliant on the availability of an adequate endowment of knowledge assets at the local level, like technological and human capital. These intangible factors enhance regional efficiency directly as inputs of the production function, but they also play a crucial role in allowing the territory to absorb the potential knowledge spillovers from the neighbouring regions. The aim of this paper is to analyse the role of the internal and external factors in determining the productivity level for a large set of regions belonging to the EU27 plus Norway and Switzerland. We estimate a Cobb-Douglas production function over the period 2000-2008 where, in addition to the traditional inputs of physical capital and units of labour, we consider innovation activities and human capital endowments as relevant knowledge assets. We also control for other geographical and industrial features of the regions. In order to take into account the commonly found geographic association across regions, our analysis is carried out within the spatial panel econometric framework. Main results, robust to a wide array of sensitivity checks, show that knowledge assets exhibit positive and significant coefficients and the impact of human capital on GDP is higher than the one found for technological capital in most of the estimated empirical models. Moreover, we find evidence of spatial spillovers directly associated with the two immaterial assets, which turn out to be much more effective in the regions of the 12 new accession countries with respect to all other European regions. The significant presence of such spillovers emphasizes the important role played by highly educated labour forces in increasing the regions' absorptive capacity of new external knowledge and in ensuring its effective use in the production process.

Suggested Citation

  • R. Paci & E. Marrocu, 2012. "Knowledge assets and regional performance," Working Paper CRENoS 201213, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
  • Handle: RePEc:cns:cnscwp:201213
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    Cited by:

    1. Zheye Wang & Yeqing Cheng & Xinyue Ye & Y. H. Dennis Wei, 2016. "Analyzing the Space–Time Dynamics of Innovation in China: ESDA and Spatial Panel Approaches," Growth and Change, Wiley Blackwell, vol. 47(1), pages 111-129, March.
    2. Roberto Camagni & Roberta Capello, 2015. "Rationale and design of EU cohesion policies in a period of crisis," Regional Science Policy & Practice, Wiley Blackwell, vol. 7(1), pages 25-47, March.
    3. Agüeros Manuel & Casares-Hontañón Pedro & Coto-Millán Pablo & Ángel Pesquera Miguel, 2015. "Technical Efficiency of the Generation of Knowledge in the European Union (2003-2010)," Bulletin of Geography. Socio-economic Series, De Gruyter Open, vol. 27(27), pages 7-16, March.
    4. Winters, John V., 2014. "STEM graduates, human capital externalities, and wages in the U.S," Regional Science and Urban Economics, Elsevier, vol. 48(C), pages 190-198.
    5. Ghisetti, Claudia & Quatraro, Francesco, 2017. "Green Technologies and Environmental Productivity: A Cross-sectoral Analysis of Direct and Indirect Effects in Italian Regions," Ecological Economics, Elsevier, vol. 132(C), pages 1-13.
    6. Roberta Capello & Camilla Lenzi, 2015. "The Knowledge–Innovation Nexus. Its Spatially Differentiated Returns to Innovation," Growth and Change, Wiley Blackwell, vol. 46(3), pages 379-399, September.
    7. repec:bla:presci:v:96:y:2017:i:4:p:817-841 is not listed on IDEAS
    8. Domingo Nevado-Peña & Víctor-Raúl López-Ruiz & José-Luis Alfaro-Navarro, 2015. "The Effects of Environmental and Social Dimensions of Sustainability in Response to the Economic Crisis of European Cities," Sustainability, MDPI, Open Access Journal, vol. 7(7), pages 1-15, June.
    9. repec:gam:jsusta:v:10:y:2018:i:2:p:319-:d:128888 is not listed on IDEAS
    10. Roberta Capello & Camilla Lenzi, 2013. "Territorial Patterns of Innovation and Economic Growth in European Regions," Growth and Change, Wiley Blackwell, vol. 44(2), pages 195-227, June.
    11. Sylvie Charlot & Riccardo Crescenzi & Antonio Musolesi, 2014. "Augmented and Unconstrained: revisiting the Regional Knowledge Production Function," SEEDS Working Papers 2414, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Aug 2014.
    12. Kuang-Hua Hu & Fu-Hsiang Chen & Gwo-Hshiung Tzeng, 2016. "Evaluating the Improvement of Sustainability of Sports Industry Policy Based on MADM," Sustainability, MDPI, Open Access Journal, vol. 8(7), pages 1-21, June.
    13. Vicente Rios & Pedro Pascual Arzoz & BelÉn iraizoz Apezteguia, 2016. "Development Differentials and Interaction Effects in the European Regions: A Study Based on the Regional Lisbon Index," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 107(3), pages 347-364, July.
    14. Roberta Capello, 2013. "Knowledge, Innovation, and Regional Performance: Toward Smart Innovation Policies," Growth and Change, Wiley Blackwell, vol. 44(2), pages 185-194, June.
    15. Riccardo Crescenzi & Mara Giua, 2014. "The EU Cohesion policy in context: regional growth and the influence of agricultural and rural development policies," LEQS – LSE 'Europe in Question' Discussion Paper Series 85, European Institute, LSE.

    More about this item

    Keywords

    innovation; human capital; production function; spatial spillovers; european regions; knowledge;

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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