Institutions and the Productivity Challenge for European Regions

Andrés Rodríguez-Pose and Roberto Ganau
Authors registered in the RePEc Author Service: Andrés Rodríguez-Pose

No 116, European Economy - Discussion Papers from Directorate General Economic and Financial Affairs (DG ECFIN), European Commission

Abstract: Europe has witnessed a considerable labour productivity slowdown in recent decades. Many potential explanations have been put forward to try to address this so-called productivity ‘puzzle’. However, how the quality of local institutions influences labour productivity in different parts of Europe has been, so far, overlooked by the literature. This paper addresses this gap in our knowledge by evaluating how the quality of local institutions affects changes in labour productivity at a regional level, across 248 European regions during the period between 2003 and 2015. The results indicate that institutional quality plays a crucial role in determining different regional labour productivity trajectories. This role is both direct – as improvements in institutional quality have a substantial impact on productivity growth – as well as indirect – as the returns of investments in human capital and local innovative capacity rise significantly as the quality of government increases.

JEL-codes: E24 J24 O47 R11 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2019-10
New Economics Papers: this item is included in nep-eff, nep-geo, nep-lma, nep-mac, nep-tid and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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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 (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:euf:dispap:116

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