László Szerb, Zsófia Fehér (p), Miklós Hornyák

Andrea Caragliu

Economic growth and development are probably the most well-known policy targets for improving the well-being of the population. However, researchers and policy makers disagree about how to achieve high growth. Some highlight the role of investment and associated savings, others believe in foreign direct investment (FDI) or institutional development. Entrepreneurship scholars emphasize the role of entrepreneurship in economic development, but they disagree about the exact definition of the term. Over the last decade, entrepreneurship ecosystem (EE) research has become a leading field in entrepreneurship research.

In this paper, we use the Regional Entrepreneurship and Development Index (REDI) methodology to analyze the EEs of 22 urban regions in Hungary. These urban regions statistically range from metropolitan agglomerations to smaller regional units with urban centers which organize their respective local economies, representing real economic entities relevant to EEs. Such an approach sheds light on the actual regional differences in entrepreneurship ecosystems since the data are aggregated at lower levels and could lead to more appropriately targeted policy interventions.

As compared to other European regions, Hungarian urban regions perform poorly in entrepreneurship. Budapest, the leading Hungarian regions, ranks 81st out of the 140 regions in the sample, and it also lags behind other similarly developed regions. Looking at the REDI sub-indices, Hungarian urban regions perform relatively well in Entrepreneurial Attitudes while Entrepreneurial Aspiration is the weakest component in 19 of them. At the pillar level, we have identified the strengths and the weaknesses of each region. The weaknesses of Hungary’s urban regions are concentrated in three pillars: Risk Acceptance and Financing are the weakest pillars for eight urban regions each, while four regions have problems regarding Opportunity Startup and the Product Innovation and Process Innovation pillar account for the lowest scores for one urban region each. Pinpointing local weaknesses is particularly important because they act as limitations on the operation of EEs and serve as a basis for policy interventions. The present research provides evidences that it is worthwhile to examine small, relative homogeneous territorial unites as compared to larger regions. We have provided additional information and more precise measurements of the entrepreneurship ecosystems for lower-level economic entities, namely urban regions, with a view to providing a basis for better, more targeted policy interventions.

Mathias Heidinger (p), Michaela Fuchs, Alain Thierstein

Zsófia Fehér

“Do jobs follow people or people follow jobs?“ is part of a decades-old debate in regional and economic science. The question of whether this growth in population, employment and jobs is demand-driven or supply-driven has yet to be answered. In his seminal work, Muth (1971) outlined two possible ways how regions grow: people move to locations where new jobs are created and conversely, new jobs are generated where people are located. In this study, we aim to add new insights from the German knowledge economy to the discussion. We do this by analyzing the change in employment of 480 firms and their respective firm locations grouped in advanced producer service firms (APS) and high-tech firms, surveyed over the period from 1999 to 2019. We use official labor market data for each firm and year provided by the Federal Employment Agency in Germany. We build on previous research in this field (e.g. Tervo 2016) by using the panel Granger causality model to study the interrelatedness of growth in the knowledge economy and general employment. In this study we examine different Granger causalities, from employment growth causing employment growth in APS/ high-tech and vice versa, to employment in APS firms causing employment growth in high-tech firms (and vice versa). We complement this study by mapping the results using GIS for 186 Functional Urban Areas (FUAs) in Germany. First results indicate that regions located near economically strong urban regions such as Munich, Hamburg, or Stuttgart exhibit a higher percentage of Granger-causal patterns.

Ghizlen Ouasbaa Azzouani (p)

Mathias Heidinger

Tourism industry is a major source of income for many countries and is often put forth as a potentially important source of economic growth for others. In Spain, it accounts for a large share of Spanish employment. However, it is not obvious whether and to what extent may represent an effective tool to boost socio-economic development. Some argue that tourism activity tends to bring with it unwanted negative economic impacts as, for example, low wages, low investment in human capital, displacement of other more productive sectors, or demand volatility (e.g., due to terrorist attacks or pandemics). The objective of this project is to study the long-term effect of tourism dependence on welfare. Specifically, I aim to provide empirical evidence on the localized effects of tourism specialization on the long-term levels of employment, income, and education of Spanish municipalities. And the same time, I also study the effect of tourism on non-touristy economic sectors and municipalities, which allows me to assess the aggregate impact of tourism in the economy. I develop a quantitative spatial equilibrium model to investigate these cross-sectoral interactions and quantify their implications both at the local level and in the aggregate. In terms of methods, I will look at the effect of cross-sectional variation in tourism attractiveness prior to the tourism boom (of the 60s and 70s) on the value of the above-mentioned outcomes more than half a century later. I use aerial photos (PNOA histórico 1956-57, Instituto Geográfico Nacional) to measure the surface of sandy beaches and other attractiveness features. At a basic level, my treated municipalities are those with a substantial beach surface and the control ones are either those without beach or those located inland. Preliminary results seem to indicate a negative relationship between tourism specialization and economic growth. I find low income and employment levels and high school dropout rates compared to non-tourist municipalities.

Roberta Capello, Andrea Caragliu (p)

Ghizlen Ouasbaa Azzouani

Digital transformations, global value chains, and regional growth in Europe: The MASST5 model

Abstract

During the past decade, global labor markets have undergone substantial transformations, mostly induced by fast diffusion of labor-saving technologies, and spurring a wave of empirical studies assessing the impact of Industry 4.0 technologies, and in particular of robotization in manufacturing industries, and digitalization in service ones, on skill composition and overall employment levels. Moreover, the largest wave of globalization recorded after the one taking place before WWI, caused first the emergence of Global Value Chains, and, more recently, their disintegration with partial mechanisms of reshoring.

This paper introduces the fifth version of the MAcroeconomic, Sectoral, Social, Territorial (MASST5) model. The MASST model carved a relevant niche in the empirical literature on macroeconometric regional growth, and this paper discusses the main advances introduced in its fifth generation, namely the possibility to model future Industry 4.0 shocks, as well as the national and regional breakdown of the way Global Value Chains will re-organize. A longer time series, especially in the regional submodel, also allows to take into account the major changes taking place in Europe following the 2007/2008 financial crisis, and the 2020 COVID-induced contraction.

Keywords: Macroeconometric regional growth, digital transformations, Global Value Chains, territorial spillovers

JEL Classification codes: R11, R12, O11