Technological Catch-Up and Regional Convergence in Europe

Our aim is to address the problem of measuring how much of the convergence observed across European regions is due to convergence in technology versus convergence in capital-labour ratios. To this aim, we first develop a growth model where technology accumulation in lagging regions depends on their own propensity to innovate and on technology diffusion from the leading region, and convergence in per capita income is due to both capital deepening and catch-up. We use data (1980-93) on 109 European regions. Propensities to innovate are computed by assigning each patent collected by the European Patent Office to its region of origin. Our findings are consistent with the hypothesis that technology differs across regions and that convergence is partly due to technological catch-up.