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Determinants of Convergence and Disparities in Europe: Innovation, Entrepreneurship and the Processes of Clustering

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  • Andreas P. Cornett
  • Nils Karl Soerensen

Abstract

Innovation and entrepreneurship are key factors in current regional development initiatives, derived from the concepts of new economic growth theory. The aim of this paper is to combine an assessment of innovative and entrepreneurial performance with the spatial distribution and functional linkages of certain types of economic clusters. The hypothesis is that clustered regions with high entrepreneurial and innovative performance have higher growth than non- innovative/entrepreneurial regions or regions with a more scattered economic structure. The clustering and in some cases even the polarization of economic activities metropolitan regions can lead to excess growth, and contribute to a process of convergence between nations, but will also turn regional economic divergence back on the national economic development agenda. The purpose of this paper is to provide in deep information on these processes in an international and perspective based on European empirical evidence. The first part of the paper addresses the development and growth issue in a theoretical development policy perspective. The impacts of innovation (measured by innovation scoreboard data) and entrepreneurship (GEM data etc.) on regional growth are estimated individual and combined as well as dummies for various levels of industrial clustering (measured by location quotients and the change of LQ) are included. Within these groups we study the process of convergence by use of the traditional measures of convergence. The findings are compared with traditional geographical convergence results, enabling an analysis based both on traditional geographical adjacent regions, often characterized by a common institutional framework, and regions characterized by common features in economic performance terms. Based on the empirical results and the findings of the literature survey in the first part of the paper the final section provides an assessment of the overall trends in economic convergence and disparities and the drivers behind this process.

Suggested Citation

  • Andreas P. Cornett & Nils Karl Soerensen, 2012. "Determinants of Convergence and Disparities in Europe: Innovation, Entrepreneurship and the Processes of Clustering," ERSA conference papers ersa12p631, European Regional Science Association.
    • Handle: RePEc:wiw:wiwrsa:ersa12p631
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    References listed on IDEAS

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    1. Etzkowitz, Henry & Leydesdorff, Loet, 2000. "The dynamics of innovation: from National Systems and "Mode 2" to a Triple Helix of university-industry-government relations," Research Policy, Elsevier, vol. 29(2), pages 109-123, February.
    2. Zoltan J. Acs & Attila Varga, 2008. "Geography, Endogenous Growth, and Innovation," Chapters, in: Entrepreneurship, Growth and Public Policy, chapter 12, pages 152-168, Edward Elgar Publishing.
    3. Maria Abreu & Henri L. F. de Groot & Raymond J. G. M. Florax, 2005. "A Meta‐Analysis of β‐Convergence: the Legendary 2%," Journal of Economic Surveys, Wiley Blackwell, vol. 19(3), pages 389-420, July.
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    5. Cornett, Andreas P. & Sørensen, Nils Karl, 2008. "International vs. Intra-national Convergence in Europe – an Assessment of Causes and Evidence," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 13, pages 35-56.
    6. Tomás Mancha-Navarro & Rubén Garrido-Yserte, 2008. "Regional policy in the European Union: The cohesion-competitiveness dilemma," Regional Science Policy & Practice, Wiley Blackwell, vol. 1(1), pages 47-66, November.
    7. Paul M. Romer, 1994. "The Origins of Endogenous Growth," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 3-22, Winter.
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    1. Andreas P. Cornett & Nils Karl Sørensen, 2016. "Innovation, income and regional development: An assessment of the importance of differences in regional potentials," ERSA conference papers ersa16p97, European Regional Science Association.
    2. Andreas P. Cornett & Nils Karl Soerensen, 2013. "Development, growth and decline in Europe: New patterns of economic convergence and divergence?," ERSA conference papers ersa13p320, European Regional Science Association.

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