Raffaele Paci

Spatial Spillovers and Innovation Activity in European Regions

This paper explores the spatial distribution of innovative activity and the role of technological spillovers in the process of knowledge creation and diffusion across 175 regions of seventeen countries in Europe (the fifteen members of the pre-2004 European Union plus Switzerland and Norway). The analysis is based on a databank set up by CRENoS on regional patenting at the European Patent Office, spanning 1978–2001 and classified by ISIC sectors. The first step is an exploratory spatial data analysis of the dissemination of innovative activity in Europe. The goal of the rest of the paper is to analyse to what extent externalities that cross regional boundaries can explain the spatial association process detected in the distribution of innovative activity in the European regions. The framework given by the knowledge-production function together with the use of spatial econometrics techniques allow us to look for insights on the mechanics of knowledge interdependences across regions, which are shown to exist. Empirical results point to the relevance of internal regional factors (R&D expenditure and agglomeration economies). Moreover, the production of knowledge appears also to be affected by spatial spillovers due to innovative activity (both patenting and R&D) performed in other regions. Additional results show that spillovers are mostly constrained by national borders within less than 250 km, and that technological similarity between regions also matters.

Technological Enclaves and Industrial Districts: An Analysis of the Regional Distribution of Innovative Activity in Europe

This paper explores the spatial distribution of innovative and productive activity across 109 regions of the European Union, thanks to an original databank on regional patents statistics. The main results worth highlighting are as follows. The technological activity in the EU appears to be highly concentrated, although concentration tends to decline over the eighties. This results from the huge differences between southern and northern Europe. As expected, there is a positive association between the regional distribution of innovative activity and labour productivity. Further, contrary to previous evidence on the United States, our data show a significant link between the specialisation in innovation and in production both at the country and at the industry level. This suggests that localised knowledge spillovers and agglomeration economies foster a local economic system towards a specialisation in both production and technology. More surprisingly there appears a negative correlation between technological concentration and aggregate productivity, that is the European regions which enjoy a more homogeneous distribution of their technological capability across different industrial sectors appear to be also characterised by a higher productivity level. This outcome may suggest the presence of positive inter-industry externalities that favour those regions which succeed in covering a broader range of technological activities.

More similar and less equal. Economic growth in the European regions

More Similar and Less Equal: Economic Growth in the European Regions. — This paper examines the growth process of 109 European regions using a new data base. Applying various statistical tools, it concentrates on per capita income and labor productivity. The main results are the following: There has been a clear process of aggregate productivity convergence across the European regions over the 1980s. At the sectoral level, there has not been convergence in agriculture, while the industrial and services sectors show ß-convergence. Most crucially, the regional dispersion in per capita income has remained almost constant so that the differences in wealth conditions of the European citizens are still extremely high.ZusammenfassungÄhnlicher und weniger gleich. Wirtschaftswachstum in den europäischen Regionen. — Der Verfasser untersucht den Wachstumsprozeß von 109 europäischen Regionen unter Verwendung einer neuen Datenbasis. Er benutzt verschiedene statistische Maße, insbesondere das Pro-Kopf-Einkommen und die Arbeitsproduktivität. Die Hauptergebnisse sind : Bei der aggregierten Produktivität hat es zwischen den europäischen Regionen in den achtziger Jahren einen klaren Konvergenzprozeß gegeben. Auf Sektorebene gab es bei der Landwirtschaft keine Konvergenz, während der Industrie- und Dienstleistungssektor eine ß-Konvergenz aufwies. Bemerkenswert ist aber, daß die regionale Verteilung des Pro-Kopf-Einkommens fast gleich geblieben ist, so daß die Unterschiede in den Wohlstandsbedingungen der europäischen Bürger immer noch extrem groß sind.

Structural change and convergence: an Italian regional perspective

Abstract The recent empirical literature on convergence among countries and regions reveals a tendency to overlook the importance of the continuous process of sectoral reallocation of resources that accompanies economic growth. The observed aggregate convergence has been interpreted as an unambiguous corroboration of the mechanistic equilibrium process implied by Solows one-sector growth model, a process independent of differences and changes in economic structures. The aim of this paper is to evaluate whether structural change is a key element in accounting for aggregate convergence for the Italian regions over the past two decades. We obtain the following results: (1) aggregate convergence is largely a matter of structural change and cannot be interpreted as strong evidence in favour of the β convergence hypothesis; and (2) the process of structural change associated with aggregate convergence seems to be limited to the transitory shift from agriculture to manufacture.

Externalities, knowledge spillovers and the spatial distribution of innovation

The aim of the paper is to investigate the process of spatial agglomeration of innovation and production activities and to assess the extent to which the degree of specialisation or diversity externalities in the area may affect the innovative output in a particular local industry. The analysis is carried out thanks to an original databank on innovation and production activity across 85 industrial sectors and 784 Italian Local Labour Systems, which are groupings of municipalities characterised by a high degree of self-contained flows of commuting workers. According to the global and local indicators of spatial association there are clear signs of spatial correlation in the distribution of innovation activities. The econometric analysis shows that the two types of externalities – specialisation and urbanisation economies – are both effective. Moreover, we find evidence for knowledge spillovers since technological activities of a local industry influence positively innovations of the same sectors in contiguous areas.

Education or Creativity: What Matters Most for Economic Performance?

Abstract There is a large consensus among social researchers on the positive role that human capital plays in economic performances. The standard way to measure the human capital endowment is to consider the educational attainments of the resident population, usually the share of people with a university degree. Florida (2002) suggested a different measure of human capital—the “creative class”—based on the actual occupations of individuals in specific jobs like science, engineering, the arts, culture, and entertainment. However, the empirical analyses conducted so far have overlooked a serious measurement problem concerning the clear definition of the education and creativity components of human capital. This article aims to disentangle this issue by proposing a disaggregation of human capital into three nonoverlapping categories: creative graduates, bohemians, and noncreative graduates. Using a spatial error model to account for spatial dependence, we assess the concurrent effect of the human capital indicators on total factor productivity for 257 regions of EU27. Our results indicate that highly educated people working in creative occupations are the most relevant component in explaining production efficiency, noncreative graduates exhibit a lower impact, and bohemians do not show a significant effect on regional performance. Moreover, a significant influence is exerted by technological capital, cultural diversity, and industrial and geographic characteristics, thus providing robust evidence that a highly educated, innovative, open, and culturally diverse environment is becoming more central for productivity enhancements.

European regional growth: do sectors matter?

The recent theoretical and empirical works on economic growth based on Solows model have generally neglected the role played by the sectoral mix and structural change on aggregate growth. However, as many development economists have remarked, sectors are characterized by enormous differences in terms of technological change, inter-sectoral linkages and the degree of scale economies. In this paper we show that indeed sectors matter in determining aggregate growth across European regions. More specifically, we show that large part of convergence is induced by a structural change process of shifting employment from low to high productive sectors that is relatively faster in the initially less productive southern European regions.

Technological Diffusion, Spatial Spillovers and Regional Convergence in Europe

In this paper we study two closely related issues. First, the role of technology heterogeneity and diffusion in the convergence of GDP per worker observed across the European regions, in the absence of data on regional TFP. Second, the spatial pattern of the observed regional heterogeneity in technology and the relevance of this pattern for the econometric analysis of regional convergence in Europe. As for the first issue, our aim is to assess whether the convergence observed across European regions is due to convergence in technology as well as to convergence in capital-labor ratios. We first develop a growth model where technology accumulation in lagging regions depends on their own propensity to innovate and on technology diffusion from the leading region, and convergence in GDP per worker is due to both capital deepening and catch-up. We use data (1978-97) on 131 European regions. Propensities to innovate are computed by assigning each patent collected by the European Patent Office to its region of origin. Our findings are consistent with the hypothesis that technology differs across regions and that convergence is partly due to technological catch-up. As for the second empirical issue, we study to what extent each region s propensity to innovate is correlated with that of the surrounding regions. Our results show, first, that the performance of each region does depend on that of the surrounding areas. Second, that the intensity of such spillovers fades with distance. Taken together, these findings suggest the existence of significant localized spillovers of technological knowledge. Finally, we show that these spillovers are strong enough to play a role that cannot be ignored in the econometric analysis of the convergence process in Europe.

Externalities and local economic growth in manufacturing industries

The growing interest on the economic geography issues has provided new vigour to the research efforts aiming at explaining economic phenomena without neglecting space. In particular several studies have focused on the role of spatially bounded externalities on firms agglomeration processes at the local industry level. This paper has a twofold objective. Firstly, we outline a general eclectic model of local economic growth to provide the theoretical background to guide the econometric analysis. The model includes a general taxonomy of different factors which may explain economic growth in a specific industry and location. Secondly, we assess the role of a large set of potential determinants of the process of local agglomeration of economic activity and we address the issue of spatial association of the local growth processes. We apply our model to the case of Italy making use of a very ample database on socio-economic indicators for 784 Local Labour Systems and 97 manufacturing sectors over the period 1991-96. Our econometric results show that local growth in Italy is not a homogeneous process. On the contrary, it is characterized by significant differences across macro regions with respect to the relevance of the explanatory factors. Among the most important determinants of local industry growth, it is worth mentioning the positive role of the diversity externalities. We also find robust evidence of the negative influence of specialisation externalities on labour dynamics at the local industry level. Moreover, we have assessed the effects of other determinants of local growth like - human capital, social environment and public infrastructures. The analysis of spatial dynamics, carried out for the North-East and Centre-North, shows that at the local industry level there are polarisation phenomena at work and that employment dynamics are self-contained within the boundaries of local labour systems once we have controlled for a large set of local determinants.

International patenting and national technological specialization

Abstract This paper is concerned with the comparison of national technological systems for six major industrialized countries. Our analysis is based on an original data bank on international patenting activity that allows one to avoid some distortions that usually affect patent statistics. As a result we offer some methodological guidelines in the use of international patenting as a national technological indicator. Further, the domestic and foreign technological profiles for the six countries are described in detail. We observe that foreign patenting may prove a misleading indicator because internal and external patenting are still two distinct phenomena.