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Regional alignement and productivity growth

Ludovic Dibiaggio, Benjamin Montmartin and Lionel Nesta
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Ludovic Dibiaggio: Histoire et Critique des Arts - Centre d'étude et de recherche d'archéologie méditerranéenne et atlantique. UHB
Benjamin Montmartin: Observatoire français des conjonctures économiques
Lionel Nesta: Observatoire français des conjonctures économiques

No 25, Sciences Po publications from Sciences Po

Abstract: We propose 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 β-convergence model using data on 94 French departments (NUTS3) for the period 2001-2011. Our results indicate that a conditional β-convergence is associated with a σ-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 diversity of regions, which suggests that regional alignment increases the value of Jacobs externalities more than Marshall-ArrowRomer (MAR) externalities. KEY

Keywords: Regional alignement; β-convergence; Productivity growth; Multi-regional model (search for similar items in EconPapers)
JEL-codes: O30 O40 R11 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eff, nep-eur, nep-geo, nep-gro, nep-knm, nep-tid and nep-ure
Date: 2018-09
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