Giulia Valeria Sonzogno (p), Mara Giua, Eleonora Pierucci, Francesco Crespi, Marco Sforza

Deyu Li

The digital transition is a strategic priority for the European Union, with significant implications for firm competitiveness and territorial cohesion. EU Cohesion Policy has played a key role in financing digitalization projects through investments in digital infrastructure, advanced training, and technological innovation. Despite the scale of these interventions, there is limited research on their actual impact at the firm level. Existing studies primarily focus on macroeconomic and regional effects, leaving a gap in understanding how digital investments influence firm’s digitalization, competitiveness and productivity.

Previous findings suggest that digital investments positively impact firm competitiveness, but their effectiveness varies by sector, firm size, and regional context. Firms in less developed regions benefit from digitalization but often face challenges related to absorptive capacity, institutional efficiency, infrastructures availability, and technological opportunities. This highlights the need for complementary policies that enhance local capabilities alongside financial investments.

This study addresses this gap by analyzing the impact of EU-funded digitalization projects under the 2014–2020 programming period on beneficiary firms. By focusing on the Italian case and leveraging project-level data from the OpenCoesione dataset and firm-level data on digital technology adoption, a counterfactual econometric approach is applied to assess the causal effects of cohesion policy intervention on firm’s digitalization.

By providing new evidence on the firm-level effects of digital transition policies, this study contributes to the broader debate on digital transition. The results emphasize the importance of policies that align digital investments with regional needs, ensuring an inclusive and effective digital transformation.

These insights have critical implications for policymakers, suggesting that future digitalization strategies should integrate financial support with capacity-building initiatives. As Europe navigates multiple transitions—digital, green, and industrial—it is essential to design policies that maximize the benefits of digitalization while addressing territorial disparities. This research provides empirical evidence to inform more effective digital transition policies, offering valuable insights for scholars, policymakers, and practitioners working on regional development and innovation policy.

Oscar Romero Goyeneche, Deyu Li (p), Ron Boschma

Aikaterini Karadimitropoulou

To address interconnected social, economic, and environmental challenges, the European Commission has introduced the Twin Transitions strategy, which integrates the Digital Strategy with the Green Deal. This initiative aims to foster economic growth, boost competitiveness, and accelerate progress toward sustainability goals. The Commission underscores the importance of ensuring that all European regions benefit from the strategy. However, regional disparities in the diversification of innovation portfolios may hinder some regions' ability to implement it effectively (Bachtrögler-Unger et al., 2023). Thus, the inquiry is how digital, green, and twin technologies are developing across European regions, and whether regions with established specialisations in green or digital technologies have the potential to also advance twin technologies.
Using the framework of regional diversification and relatedness (Balland et al., 2019; Pinheiro et al., 2022; Rigby et al., 2022), the existing scientific and invention landscape for green and digital technologies is mapped across European regions. The analysis uses patents as indicators of invention and scientific publication as a proxy of scientific knowledge production. The relatedness framework enables the identification of regional capabilities and the potential to integrate green and digital technologies (Bachtrögler-Unger et al., 2023). Regions highly specialised in green and digital technologies are highlighted alongside regions where twin technologies are likely to emerge.
The analyses focus on identifying common building blocks in the patenting and publishing of green and digital technologies. Co-citation networks are used to identify cognitive linkages between green and digital technologies, enabling the identification of twin
scientific publications and patents. Following this, digital, green, and twin capabilities in publishing and patenting are mapped and compared against social, economic, and environmental indicators, including GDP, unemployment rates, and greenhouse gas emissions. This comparison provides a contextual framework for interpreting the results. Additionally, the cross-collaboration between regions is evaluated to identify regions with country-level or European-level collaboration. Lastly, the analysis incorporates temporal dynamics and mapping regional trajectories. For instance, regions transitioning from green specialization to twin specialisation (green and digital) are identified, as well as regions that attempted to develop green and digital capabilities but did not succeed.

Aikaterini Karadimitropoulou (p), Krysztof Beck

George Tsomidis

Ongoing monetary integration in Europe requires close monitoring of the degree of business cycle (BC) synchronization to assess the effectiveness of the common monetary policy. A Bayesian dynamic latent factor model is estimated using disaggregated real gross value added (GVA) data that includes four different types of factors: European, country, sectoral and regional. A richer factor structure reduces the variance attributed to the European factor (9%), while country, sectoral, and regional factors account for 26%, 21%, and 27%, respectively. Sectoral factors are the main drivers of international BC. Sub-periods analysis shows that the share of variance explained by the European factor increased modestly, while the share explained by the sectoral factor increased significantly at the expense of the country factor. The results support that, when using a rich data structure, the European Commission's view and Krugman's view on the synchronization of BC in the monetary union can co-exist. Next, using Bayesian model averaging, the country factor is prevalent in regions characterized by the highest degree of specialization and belonging to countries with the least developed financial markets and most volatile exchange rates. The sectoral factor is most prevalent in regions that are part of countries with the most developed financial markets. Finally, the importance of commodity, monetary, fiscal, productivity, and terms of trade factors is examined for the European and country factors using factor-augmented vector autoregression models.

George Tsomidis (p), Alexandros Bechlioulis, Tryfonas Christou, Claire Economidou, Nikolas Topaloglou

Arsenios Georgios Prelorentzos

Digital technology is more than a tool we use. It is a transformative force already reshaping governments, economies, societies and the world as we know it. Europe is undergoing a transition of digitalization that is drastically changing the way its economy works.This poses critical challenges to the EU?s long-standing goal of promoting upward convergence and the treaty-enshrined objective of economic, social and territorial cohesion. To face up squarely to the challenges of the digital transition, EU has set of far-reaching policies and large-scale funding in place. For practical purposes, the Commission has broken down this vision into four areas ? skills, government, infrastructure and business, and has underpinned each of these fields with measurable objectives to be achieved before the decade is out. To master the digital transition for the economy, the Digital Economy and Society Index (DESI) of the European Commission sets out three levers that must be set correctly.

Arsenios Georgios Prelorentzos (p), Tryfonas Christou, Panayotis Michaelides

Giulia Valeria Sonzogno

Climate change presents major challenges to urban infrastructure, particularly in cities heavily reliant on tourism, such as Athens, Greece. As a key cultural and historical destination, Athens is becoming increasingly vulnerable to rising temperatures and extreme weather events, including intensified precipitation, which may heighten associated risks. As a result, the city's tourism industry is expected to be influenced by shifting weather patterns. This study analyzes monthly data from 1995 to 2023, incorporating cumulative precipitation, average temperatures, tourism expenditures, tourist arrivals, and key macroeconomic indicators—including inflation and overall economic conditions—to assess the complex effects of climate change on Athens' tourism sector. The econometric analysis considers seasonal variations in weather-related impacts on tourism expenditures. Our findings indicate that while precipitation has a relatively minor but statistically significant effect, average temperature exerts a seasonally strong influence on tourism expenditures. These results remain consistent across multiple estimation techniques and models, with a resampling-based simulation reinforcing their reliability. The study underscores the necessity for adaptive and targeted policies to enhance climate resilience in Athens' tourism sector. Measures should prioritize the development of sustainable tourism practices, improvements in urban infrastructure, and the implementation of strategies to mitigate the adverse impacts of extreme weather conditions, ensuring long-term stability and sustainability for the city’s tourism industry.