Institutions and the productivity challenge for European regions

Andrés Rodríguez-Pose and Roberto Ganau

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

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 article 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: J01 N0 R14 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2022-01-01
New Economics Papers: this item is included in nep-eff, nep-geo, nep-his, 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 (3)

Published in Journal of Economic Geography, 1, January, 2022, 22(1), pp. 1 - 25. ISSN: 1468-2702

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http://eprints.lse.ac.uk/108915/ Open access version. (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 (2021)
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:ehl:lserod:108915

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