Declan Jordan

Decomposing European NUTS2 regional inequality from 1980 to 2009: National and European policy implications

Purpose – The purpose of this paper is to analyse income inequality for a sample of 14 European countries and their composite regions using data from the Cambridge Econometrics regional dataset from 1980 to 2009. The purpose of the paper is to provide insight into the dynamics of regional and national cohesion among the EU-14 countries studied. Design/methodology/approach – Initially, inequality is decomposed using the Theil coefficient into between and within country inequality to assess the extent to which convergence has occurred. To investigate the underlying causes of the changes in inequality, the Theil coefficient is further decomposed to assess the contribution of productivity and employment-population ratio differentials to inequality. Findings – The results indicate that while between-country inequality has declined, within-country inequality has increased by approximately 50 percent. Subsequent decomposition indicates that while productivity levels among regions have converged, the employment-population ratios have diverged substantially driving increasing levels of inequality. This suggests that while EU cohesion policies have reduced productivity inequalities they have had little effect in stimulating convergence of employment-population ratios across regions. Research limitations/implications – The paper argues that national priorities, particularly in the context of the current European economic crisis, are likely to hinder European Union level policies to reduce income inequality at a regional level. This may result in further increases in regional inequality among European regions. Originality/value – This papers main contribution is to highlight how national convergence can lead to regional divergence being overlooked. The value of the paper is that it provides policy insights, based on empirical evidence, for European cohesion policy.

Local Labour Market Diversity and Business Innovation: Evidence from Irish Manufacturing Businesses

This paper estimates the effect of diversity within local labour markets on business-level innovation. Using survey data and Irish census data, the paper explores whether the diversity of human capital at county level is associated with higher innovation output. Diversity in age, nationality and educational attainment is measured using an index of heterogeneity and its effect on business innovation is estimated using an innovation production function approach. It is found that diversity in nationality and educational attainment is positively associated with the probability of a business product innovating. The findings also suggest that greater external labour market diversity and greater levels of internal third-level education may be substitutes. Where a business is in a diverse location, it may not require higher levels of educational attainment among its workforce to source knowledge for product innovation.

The effects of national and international interaction on innovation: evidence from the Irish CIS: 2004-6

This paper analyses the importance of decisions to interact nationally and internationally for the likelihood of process and product innovation in a sample of Irish firms. The key contribution is to provide an empirical test of the relative importance of geographically proximate versus distant interaction, using a two-step procedure to remove potential endogeneity in interaction decisions. In doing so it finds that only national and only international interaction have the expected positive effects on the probability of innovation, while engaging in both national and international interaction has no effect. The findings support hypotheses on the importance of both geographically proximate and distant interaction for innovation, though the lack of significance for both national and international interaction means there is no evidence to support the proposition that these forms of interaction are complementary.

The Role of External Interaction for Innovation in Irish High-Technology Businesses

There is growing empirical evidence that external interaction is an important source of knowledge for business innovation. This paper contributes to the innovation literature by using new measures of interaction to explore the relative importance of external interaction for innovation in Irish high-technology businesses. Based on survey data, the paper finds that external interaction increases the probability of product and process innovation, but the effect is inconsistent across all external interaction agents. Interaction along the supply chain has a positive effect on innovation, and interaction with competitors has an insignificant effect on innovation output. Notably, the paper finds that interaction with higher education institutions has a negative effect on the probability of product and process innovation.

Does more competition increase business-level innovation? Evidence from domestically focused firms in emerging economies

ABSTRACT This paper explores the relationship between the level of competition and innovation output for domestically focused businesses in emerging economies in Central and Eastern Europe and Central Asia. It uses survey data from 5054 businesses from the fifth Business Environment and Enterprise Performance Survey. A multivariate probit estimation of the likelihood of different innovation types finds that higher levels of competition are associated with greater likelihood of innovation, but this rises at a decreasing rate as competitor numbers grow. Also, firms operating in economies where competition policy is more effectively enforced are more likely to innovate. However, there is a point where ‘too much’ competition leads to less innovation – suggesting a tipping point effect. This suggests that policies to maximise competition, as measured by number of competitors, may not be optimal for promoting innovation in emerging economies. This requires a need for more nuanced competition policy approaches. The paper also finds that businesses relying on local markets are significantly less likely to introduce innovations than businesses trading domestically outside their local area, but increased competition in local markets increases the likelihood of businesses introducing product innovation. This points to a local rivalry effect.

Virtual Special Issue on Migration

Abstract This editorial introduces a virtual special issue of Spatial Economic Analysis compiled to mark the keynote lecture at the 46th Annual Conference of the Regional Science Association International—British and Irish Section in Cornwall by Professor Jacques Poot of the National Institute of Demographic and Economic Analysis, University of Waikato. Professor Poots lecture on migration, which is also the theme of this virtual special issue, could not be more topical. Migration is a central issue in public discourse in Europe and the United States, and is setting the agenda for political debate throughout the developed world. The ongoing refugee crisis in Europe, the associated rise in populist, nationalist political movements in Europe and the United States, and the recent vote by the UK to leave the European Union all have migration at their centre.

Cross-sectoral differences in the drivers of innovation: evidence from the Irish Community Innovation Survey

Purpose The purpose of this paper is to analyse differences in the drivers of firm innovation performance across sectors. The literature often makes the assumption that firms in different sectors differ in their propensity to innovate but not in the drivers of innovation. The authors empirically assess whether this assumption is accurate through a series of econometric estimations and tests. Design/methodology/approach The data used are derived from the Irish Community Innovation Survey 2004-2006. A series of multivariate probit models are estimated and the resulting coefficients are tested for parameter stability across sectors using likelihood ratio tests. Findings The results indicate that there is a strong degree of heterogeneity in the drivers of innovation across sectors. The determinants of process, organisational, new to firm and new to market innovation varies across sectors suggesting that the pooling of sectors in an innovation production function may lead to biased inferences. Research limitations/implications The implications of the results are that innovation policies targeted at stimulating innovation need to be tailored to particular industries. One size fits all policies would seem inappropriate given the large degree of heterogeneity observed across the drivers of innovation in different sectors. Originality/value The value of this paper is that it provides an empirical test as to whether it is suitable to group sectoral data when estimating innovation production functions. Most papers simply include sectoral dummies, implying that only the propensity to innovate differs across sectors and that the slope of the coefficient estimates are in fact consistent across sectors.

Virtual special issue on urban development

ABSTRACT This virtual special issue of Spatial Economic Analysis marks the keynote lecture at the 47th Annual Conference of the Regional Science Association International – British and Irish Section in Harrogate by Professor Bob Stimson of the University of Queensland, Australia. With over half the world’s population now living in urban areas, which according to the United Nations is expected rise to 66% by 2050, the theme of Professor Stimson’s lecture – urban development – is of critical importance. Cities provide significant opportunities for economic growth and development as long as urban design models are not only effective but also sustainable, inclusive and equitable. This virtual special issue draws together 10 articles from earlier issues of the journal, which inform a successful urban design agenda.

Decomposing US regional income inequality from 1969 to 2009

ABSTRACT This article analyses changes in levels and composition of income inequality among US counties from 1969 to 2009. It also decomposes inequality using the Theil coefficient into between-State and within-State inequality. The article finds that income inequality has increased in the period studied with between-State inequality decreasing and within-State inequality increasing. We subsequently decompose income inequality into the proportion arising from differences in productivity and employment–population ratios across counties. The results suggest that inequality arising from differentials in labour productivity has fallen over the period studied while those arising from employment–population ratio differences have increased.

A two-stage examination of business innovation decision-making: evidence from Ireland

This paper explores business-level innovation decision-making by comparing the power of one-stage and two-stage models. A one-stage model represents the business making a one-off choice between four discrete innovation decisions. The two-stage model represents the business making an initial decision on whether or not to innovate, facilitating analysis of business innovation as simultaneous and sequential processes. This allows identification of the model which best explains innovation decision-making. Using original business-level survey data of over 400 SMEs in Ireland, results suggest that a two-stage model of the innovation decision has a statistically significant advantage in predicting innovation output, indicating the use of a two-stage model provides a better understanding of the impact of different knowledge sources on different types of innovation.