Quality of government and innovative performance in the regions of Europe

Andrés Rodríguez-Pose and Marco Di-Cataldo
Authors registered in the RePEc Author Service: Marco Di Cataldo

No 1406, Papers in Evolutionary Economic Geography (PEEG) from Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography

Abstract: Although it has frequently been argued that the quality of institutions affects the innovative potential of a territory, the link between institutions and innovation remains a black box. This paper aims to shed light on how institutions shape innovative capacity, by focusing on how regional government quality affects innovative performance in the regions of Europe. By exploiting new data on quality of government (QoG), we assess how government quality and its components (control of corruption, rule of law, government effectiveness and government accountability) shape patenting capacity across the regions of the European Union (EU). The results of the analysis – which are robust to controlling for the endogeneity of institutions – provide strong evidence of a causal link between the quality of local governments and the capacity of territories to generate innovation. In particular, low quality of government becomes a fundamental barrier for the innovative capacity of the periphery of the EU, strongly undermining any potential effect of any other measures aimed at promoting greater innovation. The results have important implications for the definition of innovation strategies in EU regions.

Keywords: Institutions; Quality of government; Innovation; Regions; Europe (search for similar items in EconPapers)
Pages: 48 pages
Date: 2014-02, Revised 2014-02
New Economics Papers: this item is included in nep-cse, nep-eff, nep-geo, nep-ino, nep-sbm, nep-tid and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (42)

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http://econ.geo.uu.nl/peeg/peeg1406.pdf Version February 2014 (application/pdf)

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Journal Article: Quality of government and innovative performance in the regions of Europe (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:egu:wpaper:1406

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