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Regional Alignment and Productivity Growth

Ludovic Dibiaggio (), Benjamin Montmartin () and Lionel Nesta ()

No 2018-18, GREDEG Working Papers from Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France

Abstract: Recent studies highlight an increasing within-country divergence in regional performance. This paper develops the concept of regional alignment to suggest that synergistic relations among the scientific expertise, technological specialization and industry composition of regions affect regional productivity growth. In this paper, we test an extended conditional beta-convergence model using data on 94 French departments (NUTS3) for the period 2001-2011. Our results indicate that a conditional beta-convergence is associated with a sigma-divergence process in the total factor productivity (TFP) growth of French regions. This process is strongly affected by the level of regional alignment. Indeed, we find evidence that regional alignment both directly and indirectly influences regional productivity growth. The indirect effect of regional alignment materializes through its leverage on R&D investment, which is one of the most important drivers of productivity growth. Moreover, using a heterogeneous coefficients model, we show that the positive effect of regional alignment on TFP growth increases with the industrial and technological diversity of regions, which suggests that regional alignment increases the value of Jacobs externalities more than Marshall-Arrow-Romer (MAR) externalities.

Keywords: Regional Alignment; beta-convergence; productivity growth; multi-regional model (search for similar items in EconPapers)
JEL-codes: R11 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2018-07
New Economics Papers: this item is included in nep-eff, nep-geo, nep-gro, nep-tid and nep-ure
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http://www.gredeg.cnrs.fr/working-papers/GREDEG-WP-2018-18.pdf First version, 2018 (application/pdf)

Related works:
Working Paper: Regional Alignement and Productivity Growth (2018) Downloads
Working Paper: Regional Alignment and Productivity Growth (2018) Downloads
Working Paper: Regional alignement and productivity growth (2018) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:gre:wpaper:2018-18

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