Institutions and the Productivity Challenge for European Regions

Andrés Rodríguez-Pose and Roberto Ganau

No 2107, Papers in Evolutionary Economic Geography (PEEG) from Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography

Abstract: Europe has witnessed a considerable labour productivity slowdown in recent decades. Many potential explanations have been proposed to address this productivity ‘puzzle’. However, how the quality of local institutions influences labour productivity has been overlooked by the literature. This paper addresses this gap by evaluating how institutional quality affects labour productivity growth and, particularly, its determinants at the regional level during the period 2003-2015. The results indicate that institutional quality influences regions’ labour productivity growth both directly —as improvements in institutional quality drive productivity growth— and indirectly —as the short- and long-run returns of human capital and innovation on labour productivity growth are affected by regional variations in institutional quality.

Keywords: Labour productivity; institutional quality; physical capital; human capital; innovation; regions; Europe (search for similar items in EconPapers)
JEL-codes: E24 J24 O47 R11 (search for similar items in EconPapers)
Date: 2021-02, Revised 2021-02
New Economics Papers: this item is included in nep-eff, nep-geo, nep-ino, nep-lma, nep-mac, nep-tid and nep-ure
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Citations: View citations in EconPapers (8)

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http://econ.geo.uu.nl/peeg/peeg2107.pdf Version February 2021 (application/pdf)

Related works:
Journal Article: Institutions and the productivity challenge for European regions (2022)
Working Paper: Institutions and the productivity challenge for European regions (2022)
Working Paper: Institutions and the Productivity Challenge for European Regions (2021)
Working Paper: Institutions and the Productivity Challenge for European Regions (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:egu:wpaper:2107

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