Territorial capital and Polish regional development. A neoclassical approach

The interaction between space (location) and the processes of accumulation (growth) is one of the most interesting and at the same time the most difficult areas of modern economic theory. The theoretical and empirical results to date are however largely unsatisfactory. In our analysis we proposed the way how to implement the space into the neoclassical Solow-Swan growth model. Territorial capital, as a specific carrier of the concept of territorial cohesion, is significantly different from the classical factors of production such as physical capital or labor input. It cannot be considered as a factor directly responsible for changes in the volume of production. However, territorial capital can have an impact on the productivity of basic factors of production such as capital and labor. Thus, when defining the function of production, we assume that territorial capital does not affect production directly, but it affects total factor productivity (TFP) indirectly, contributing to an increase in the production. In this paper we present our research findings on the contribution of various elements of territorial capital to regional growth in Poland. The study adopts a highly spatially disaggregated NUTS-4 level, i.e. counties, for which interactions and relationships of a spatial and territorial nature are particularly relevant.