Cristina Serbanica (p), Ovidiu Puiu

Raquel Ortega-Argilés

”See extended abstract”

Javier Barbero Jimenez (p), Olga Diukanova, Artur Santoalha

Cristina Serbanica

As S3 (Smart Specialization Strategy) has been increasingly associated with diversification, or ‘diversified specialization’, regional diversification offers a relevant framework for studying S3 processes in European regions. Therefore, processes of regional diversification constitute an important aspect of S3 that is worth to explore. Is technological diversification predicted to foster regional economic growth and employment? If so, in which sectors is such impact expected to be stronger?
In this paper we propose augmenting Rhomolo model by integrating technological diversification into the model. Rhomolo is a recursive-dynamic spatial computable general equilibrium model used by the European Commission for ex-ante evaluation of EU regional policies. The impact on macroeconomic variables (GDP, production, employment, etc) is measured at the level of NUTS2 regions. The idea is to link diversification indices with an increase of total factor productivity (by region and sector). As counterfactual scenarios, we intend to investigate the macroeconomic impacts of changes in regional diversification induced by S3 policies.
Specifically, we have built up a panel of European regions for the period 2000-2013 by combining data and indicators from different data sources, such as the Eurostat's regional statistics, the OECD REGPAT database, and other available regional databases. We derive the technological diversification performance of the regions from the OECD REGPAT database.

Stanisław Umiński (p), Jarosław Nazarczuk , Tomasz Jurkiewicz

Javier Barbero Jimenez

See extended abstract

Dieter Franz Kogler , Raquel Ortega-Argilés (p), Silvia Rocchetta

Stanislaw Uminski

This paper explores the effect of different regional technological profiles on regional economic performance. Recent literature theorizes and test whether technological diversification drives regional performance due to the potential benefits of knowledge recombination processes (Frenken et al. 2007; Frenken and Boschma 2007; Foray, 2014).
In particular our analysis, which is motivated by the higher levels of heterogeneity that can be found exploring the technological profiles of regions in the EU (OECD, 2013), aims at shedding some light on the relationship between technological diversification and regional performance, in a moment where many European regions are setting up Regional Smart Specialisation Strategies. For doing that, we explore the potential non-linear effects between technological proximity/ regional technological diversification and regional economic growth in EU regions arguing that advantages for potential knowledge recombination may only appear when have acquired certain levels of technological proximity.
The econometric analysis is carried out with data on 370 EU28 countries plus Switzerland, Norway and candidate countries NUTS II regions observed over the 2004-2015 period. Following prior work, we measured labour productivity growth using the information on the regional gross valued added and regional employment. As we want to analyse the impact of technological diversification and coherence on regional productivity we include in our empirical analyses an Information Entropy Index and a Technological Coherence Index. The Information Entropy Index uses information on inventor location and 3-digit technology codes to explore the extent of regions technological diversification. Regional Technological Coherence index, instead, allows us to evaluate the level epistemic proximity between the patent classes the make up the regional technological structure. In our econometric estimation, while focusing on the role of technological coherence and variety on regional productivity growth we also take into account the effect of the region’s employment density, stock of technological capital, level of human capital and population size. In the econometric analysis, we apply multilevel modelling to estimate the degree to which each geographically determined level is contributing to the explained and unexplained variation of regional productivity.
Our early findings show higher levels of technological coherence may be negatively related with higher levels of regional performance as they will be linked with potential risks of industrial lock in. While in the case of entropy, we found that higher regional performance can only be found at higher levels of industrial technological relatedness or epistemic proximity as we hypothesized.