Framework Conditions, Innovation and Productivity in European Regions

  • Debora Revoltella
  • Andrea BrasiliEmail author
  • Rocco L. Bubbico
  • Annamária Tüske
  • Christoph Weiss


This paper uses regional structural indicators and firm-level data of the EIB Investment Survey to show that framework conditions and firm innovation inputs affect innovation performance and regional productivity growth. We argue that, in addition to more R&D investments and access to higher levels of human capital, improvements in the regional business environment—including the quality of institutions and infrastructure—can help firms close the gap with the technological frontier and support the economic development of European regions.


EU regions Innovation Patents Framework conditions Regional productivity 

JEL Classification

E22 O31 O38 R11 



The authors thank the anonymous referees for their helpful comments and feedback.


  1. Acemoglu, D., S. Johnson, and J.A. Robinson. 2005. Institutions as a Fundamental Cause of Long-Run Growth. In Handbook of Economic Growth, vol. 1, ed. P. Aghion and S.N. Durlauf, 385–472. Amsterdam: North-Holland.Google Scholar
  2. Annoni P., L. Dijkstra, and N. Gargano. 2017. The EU Regional Competitiveness Index 2016. European Commission Directorate-General for Regional and Urban Policy Working Paper 02/2017.Google Scholar
  3. Asikainen, A.-L., and G. Mangiarotti. 2016. Contribution of Knowledge Intensive Activities to Regional Competitiveness: Production Function Approach. In Knowledge Intensive Business Services and Regional Competitiveness, ed. J.J.M. Ferreira, M.L. Raposo, C.I. Fernandes, and M. Dejardin, 192–210. Abingdon: Routledge.Google Scholar
  4. Borsi, M.T., and N. Metiu. 2015. The Evolution of Economic Convergence in the European Union. Empirical Economics 48(2): 657–681.CrossRefGoogle Scholar
  5. Bubbico, R., and P. Wruuck. 2018. EIB Investment Survey 2017: Regional Results. Luxembourg: European Investment Bank.Google Scholar
  6. Camagni, R., and R. Capello. 2002. Milieux Innovateurs and Collective Learning: From Concepts to Measurement. In The Emergence of the Knowledge Economy, ed. Z.J. Acs, H.L.F. de Groot, and P. Nijkamp, 15–45. Berlin: Springer.CrossRefGoogle Scholar
  7. Charron, N., S. Dahlberg, S. Holmberg, B. Rothstein, A. Khomenko and R. Svensson. 2016. The Quality of Government EU Regional Dataset, Version Sep 16. University of Gothenburg, The Quality of Government Institute.Google Scholar
  8. Charron, N., V. Lapuente, and L. Dijkstra. 2014. Regional Governance Matters: A Study on Regional Variation in Quality of Government Within the EU. Regional Studies 48(1): 68–90.CrossRefGoogle Scholar
  9. Cirera, X., and W.F. Maloney. 2017. The Innovation Paradox: Developing-Country Capabilities and the Unrealized Promise of Technological Catch-Up. Washington, DC: World Bank.CrossRefGoogle Scholar
  10. Cooke, P., M.G. Uranga, and G. Etxebarria. 1997. Regional Innovation Systems: Institutional and Organisational Dimensions. Research Policy 26: 475–491.CrossRefGoogle Scholar
  11. Crescenzi, R., M. Di Cataldo, and A. Rodríguez-Pose. 2016. Government Quality and the Economic Returns of Transport Infrastructure Investment in European Regions. Journal of Regional Science 56(4): 555–582.CrossRefGoogle Scholar
  12. Crescenzi, R., and A. Rodríguez-Pose. 2009. Systems of Innovation and Regional Growth in the EU: Endogenous Versus External Innovative Activities and Socio-economic Conditions. In Growth and Innovation of Competitive Regions, ed. U. Fratesi and L. Senn, 167–191. Berlin: Springer.CrossRefGoogle Scholar
  13. EIB. 2016. Investment and Investment Finance in Europe 2016: Financing Productivity Growth. Luxembourg: European Investment Bank.Google Scholar
  14. EIB. 2017. Investment Report 2017/2018: From Recovery to Sustainable Growth. Luxembourg: European Investment Bank.Google Scholar
  15. EIB. 2018a. EIB Investment Survey, EU Overview. Luxembourg: European Investment Bank.Google Scholar
  16. EIB. 2018b. Investment Report 2018/2019: Retooling Europe’s Economy. Luxembourg: European Investment Bank.Google Scholar
  17. European Commission. 2017a. My Region, My Europe, Our Future: Seventh Report on Economic, Social and Territorial Cohesion. Directorate-General for Regional and Urban Policy. Luxembourg: Publications Office of the European Union.Google Scholar
  18. European Commission. 2017b. Competitiveness in Low-Income and Low-Growth Regions. The Lagging Regions Report. SWD (2017) 132 Final, Brussels 10.4.2017.Google Scholar
  19. Farole, T., I. Hallak, P. Harasztosi, and S. Tan. 2017. Business Environment and Firm Performance in European Lagging Regions. World Bank Policy Research Working Paper No. 8281.Google Scholar
  20. Haskel, J., and S. Westlake. 2017. Capitalism Without Capital: The Rise of the Intangible Economy. Princeton, NJ: Princeton University Press.CrossRefGoogle Scholar
  21. Holmberg, S., B. Rothstein, and N. Nasiritousi. 2009. Quality of Government: What You Get. Annual Review of Political Science 12: 135–161.CrossRefGoogle Scholar
  22. Iammarino, S., A. Rodríguez-Pose, and M. Storper. 2017. Why Regional Development Matters for Europe’s Economic Future. European Commission Directorate-General for Regional and Urban Policy Working Paper 07/2017.Google Scholar
  23. Iammarino, S., A. Rodriguez-Pose, and M. Storper. 2018. Regional Inequality in Europe: Evidence, Theory and Policy Implications. CEPR Discussion Paper No. 12841.Google Scholar
  24. Jones, C.I. 2016. The Facts of Economic Growth. In Handbook of Macroeconomics, vol. 2, ed. J.B. Taylor and H. Uhlig, 3–69. Amsterdam: Elsevier.Google Scholar
  25. Kenney, M. 2000. Understanding Silicon Valley: The Anatomy of an Entrepreneurial Region. Stanford, CA: Stanford University Press.Google Scholar
  26. Ketterer, T.D., and A. Rodríguez-Pose. 2018. Institutions Versus ‘First-Nature’ Geography: What Drives Economic Growth in Europe’s Regions? Papers in Regional Science 97: S25–S62.CrossRefGoogle Scholar
  27. Männasoo, K., H. Hein, and R. Ruubel. 2018. The Contributions of Human Capital, R&D Spending and Convergence to Total Factor Productivity Growth. Regional Studies 52: 1598–1611.CrossRefGoogle Scholar
  28. Mo, P.H. 2001. Corruption and Economic Growth. Journal of Comparative Economics 29(1): 66–79.CrossRefGoogle Scholar
  29. Morgan, K. 2007. The Learning Region: Institutions, Innovation and Regional Renewal. Regional Studies 31(5): 491–503.CrossRefGoogle Scholar
  30. Nelson, R., and N. Rosenberg. 1993. Technical Innovation and National Systems. In National Systems of Innovation: A Comparative Study, ed. R. Nelson, 3–28. Oxford: Oxford University Press.Google Scholar
  31. OECD. 2016. OECD Science, Technology and Innovation Outlook 2016. Paris: OECD Publishing.CrossRefGoogle Scholar
  32. Oughton, C., M. Landabaso, and K. Morgan. 2002. The Regional Innovation Paradox: Innovation Policy and Industrial Policy. The Journal of Technology Transfer 27(1): 97–110.CrossRefGoogle Scholar
  33. Rodríguez-Pose, A., and M. Di Cataldo. 2014. Quality of Government and Innovative Performance in the Regions of Europe. Journal of Economic Geography 15(4): 673–706.CrossRefGoogle Scholar
  34. Romer, P. 1990. Endogenous Technological Change. Journal of Political Economy 98(5): 71–102.CrossRefGoogle Scholar
  35. Saxenian, A. 1990. Regional Networks and the Resurgence of Silicon Valley. California Management Review 33(1): 89–112.CrossRefGoogle Scholar

Copyright information

© Association for Comparative Economic Studies 2019

Authors and Affiliations

  1. 1.Economics DepartmentEuropean Investment BankLuxembourgLuxembourg

Personalised recommendations