Investment and Employment across the European Regions. An Analysis for Types of Investment

Sergio Destefanis and Naqeeb Ur Rehman
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Naqeeb Ur Rehman: Westminster International University, Tashkent

No 2022-07, Discussion Paper series in Regional Science & Economic Geography from Gran Sasso Science Institute, Social Sciences

Abstract: This study examines the effect of various forms of investment expenditure (gross fixed capital formation, R&D and European Structural and Investment Funds) on employment across NUTS2 European regions from 2000 to 2016. We find that the effect of R&D is heavily conditional upon regional characteristics. Only in NUTS2 regions with medium to high levels of innovation is R&D likely to generate employment. Gross fixed capital formation is labour friendly, but less so in highly innovative regions. Accordingly, the more that European regions shift closer to the world’s technology frontier, the more that R&D expenditure, rather than investment in physical assets, will be capable of generating positive employment externalities. Among European Structural and Investment Funds, we find an especially significant effect for the European Agricultural Fund for Rural Development (in the more developed regions) and the Cohesion Fund.

Keywords: gross fixed capital formation; ESIF; R&D; Cohesion Policy (search for similar items in EconPapers)
JEL-codes: E24 O32 O33 O38 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2022-10, Revised 2024-10
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Persistent link: https://EconPapers.repec.org/RePEc:ahy:wpaper:wp33

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