The Impact of Economic Specialization on Regional Economic Development in the European Union: Insights for Formation of Smart Specialization Strategy

Giedrė Dzemydaitė
Additional contact information
Giedrė Dzemydaitė: Faculty of Economics and Business Administration, Vilnius University, Saulėtekio av. 9, LT-10222 Vilnius, Lithuania

Economies, 2021, vol. 9, issue 2, 1-15

Abstract: The smart specialization concept was implemented in the EU in 2014, stating that regions have to specify specialization areas for development of innovations. Economic specialization reveals a comparative advantage in that field. However, there are different arguments linking specialization to economic development. This study analyzes these arguments and aims to investigate the impact of economic specialization on regional economic development and to give insights into identifying prospective areas in regional economies. A panel fixed effect estimation of industry-level regional data suggests that economic specialization in broader regional employment, called relative specialization, is ambiguously associated with economic development. Our findings suggest that neither economic specialization nor economic diversity are a clear-cut solution for ensuring economic growth. Economic structure in EU regions differs, and there is no one answer for which approach is better for economic development. Specialization measures, particularly the location quotient, cannot fully capture the dynamics in the industry structure that could be essential for formation of regional development strategy.

Keywords: economic structure; economic specialization; smart specialization; economic growth; EU regions; tradable sectors (search for similar items in EconPapers)
JEL-codes: E F I J O Q (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.mdpi.com/2227-7099/9/2/76/pdf (application/pdf)
https://www.mdpi.com/2227-7099/9/2/76/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jecomi:v:9:y:2021:i:2:p:76-:d:553637

Access Statistics for this article

Economies is currently edited by Ms. Adore Zhou

More articles in Economies from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().