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Quality of government and innovative performance in the regions of Europe

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  • Andrés Rodríguez-Pose
  • Marco Di-Cataldo

Abstract

Although it has frequently been argued that the quality of institutions affects the innovative potential of a territory, the link between institutions and innovation remains a black box. This paper aims to shed light on how institutions shape innovative capacity, by focusing on how regional government quality affects innovative performance in the regions of Europe. By exploiting new data on quality of government (QoG), we assess how government quality and its components (control of corruption, rule of law, government effectiveness and government accountability) shape patenting capacity across the regions of the European Union (EU). The results of the analysis – which are robust to controlling for the endogeneity of institutions – provide strong evidence of a causal link between the quality of local governments and the capacity of territories to generate innovation. In particular, low quality of government becomes a fundamental barrier for the innovative capacity of the periphery of the EU, strongly undermining any potential effect of any other measures aimed at promoting greater innovation. The results have important implications for the definition of innovation strategies in EU regions.

Suggested Citation

  • Andrés Rodríguez-Pose & Marco Di-Cataldo, 2014. "Quality of government and innovative performance in the regions of Europe," Papers in Evolutionary Economic Geography (PEEG) 1406, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Feb 2014.
  • Handle: RePEc:egu:wpaper:1406
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    Cited by:

    1. Jean Bonnet & Sébastien Bourdin & Fatten Gazzah, 2017. "The entrepreuneurial context, a factor of Economic Growth in the Europe Union? A GWR analysis on the EU Regions," Working Papers halshs-01619798, HAL.
    2. Ron Boschma, 2015. "Towards an Evolutionary Perspective on Regional Resilience," Regional Studies, Taylor & Francis Journals, vol. 49(5), pages 733-751, May.
    3. Tobias Ketterer & Andrés Rodríguez-Pose, 2015. "Local quality of government and voting with one’s feet," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 55(2), pages 501-532, December.
    4. Di Cataldo, Marco & Rodríguez-Pose, Andrés, 2016. "What drives employment growth and social inclusion in EU regions?," CEPR Discussion Papers 11551, C.E.P.R. Discussion Papers.
    5. Nicola Cortinovis & Jing Xiao & Ron Boschma & Frank G van Oort, 2017. "Quality of government and social capital as drivers of regional diversification in Europe," Journal of Economic Geography, Oxford University Press, vol. 17(6), pages 1179-1208.
    6. Boschma, Ron & Capone, Gianluca, 2015. "Institutions and diversification: Related versus unrelated diversification in a varieties of capitalism framework," Research Policy, Elsevier, vol. 44(10), pages 1902-1914.
    7. Raffaela Giordano & Sergi Lanau & Pietro Tommasino & Petia Topalova, 2015. "Does Public Sector Inefficiency Constrain Firm Productivity; Evidence from Italian Provinces," IMF Working Papers 15/168, International Monetary Fund.
    8. Becker, Sascha O. & Egger, Peter H. & von Ehrlich, Maximilian, 2018. "Effects of EU Regional Policy: 1989-2013," Regional Science and Urban Economics, Elsevier, vol. 69(C), pages 143-152.
    9. Fitjar, Rune Dahl, 2017. "Mot en regional innovasjonspolitikk?," UiS Working Papers in Economics and Finance 2017/9, University of Stavanger.
    10. Roberto Antonietti & Ron Boschma, 2018. "Social capital, resilience and regional diversification in Italy," Papers in Evolutionary Economic Geography (PEEG) 1804, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Jan 2018.
    11. Grillitsch, Markus, 2018. "Place-based entrepreneurship and innovation policy for industrial diversification," Papers in Innovation Studies 2018/3, Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy.
    12. Andrés Rodríguez-Pose & Tobias Ketterer, 2018. "Institutional change and the development of lagging regions in Europe," Working Papers. Collection A: Public economics, governance and decentralization 1808, Universidade de Vigo, GEN - Governance and Economics research Network.
    13. Evert Meijers & Martijn Burger & Mark Thissen & Thomas Graaff & Frank Oort, 2016. "Competitive network positions in trade and structural economic growth: A geographically weighted regression analysis for European regions," Papers in Regional Science, Wiley Blackwell, vol. 95(1), pages 159-180, March.
    14. Tobias Ketterer & Andrés Rodríguez-Pose, 2016. "Institutions vs. ‘First-Nature’ Geography – What Drives Economic Growth in Europe’s Regions?," Papers in Evolutionary Economic Geography (PEEG) 1614, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Jun 2016.
    15. Fernanda Ricotta, 2016. "The Quality Of Regional Government And Firm Performance," Working Papers 201606, Università della Calabria, Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF.
    16. repec:eee:worbus:v:53:y:2018:i:3:p:392-402 is not listed on IDEAS
    17. Grillitsch, Markus, 2017. "Transformation Capacity of the Innovative Entrepreneur: On the interplay between social structure and agency," Papers in Innovation Studies 2017/2, Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy.
    18. repec:pal:jintbs:v:48:y:2017:i:5:d:10.1057_s41267-016-0055-7 is not listed on IDEAS
    19. Váry, Miklós, 2017. "Számít-e a földrajzi elhelyezkedés?. A nyugat-európai régiók fejlettségének térökonometriai vizsgálata
      [Does geography matter?. A spatial econometric investigation of development in West European r
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    20. Riccardo Crescenzi & Marco Di Cataldo & Andrés Rodríguez-Pose, 2016. "Government Quality And The Economic Returns Of Transport Infrastructure Investment In European Regions," Journal of Regional Science, Wiley Blackwell, vol. 56(4), pages 555-582, September.
    21. Lidia Mannarino & Valeria Pupo & Fernanda Ricotta, 2016. "Family Firms And Productivity: The Role Of Institutional Quality," Working Papers 201605, Università della Calabria, Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF.
    22. d'Agostino, Giorgio & Scarlato, Margherita, 2016. "Institutions, Innovation and Economic Growth in European Countries," MPRA Paper 72427, University Library of Munich, Germany.
    23. repec:eee:respol:v:47:y:2018:i:1:p:1-13 is not listed on IDEAS
    24. Riccardo Crescenzi & Simona Iammarino, 2016. "Global Investments and Regional Development Trajectories: the Missing Links," LEQS – LSE 'Europe in Question' Discussion Paper Series 118, European Institute, LSE.
    25. Fernanda Ricotta, 2016. "The Quality of Regional Government and Firm Performance," ERSA conference papers ersa16p357, European Regional Science Association.

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    Institutions; Quality of government; Innovation; Regions; Europe;

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