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Science and productivity in European Firms: How do regional innovation modes matter?

Author

Listed:
  • Natália Barbosa
  • Ana Paula Faria

    (Department of Economics and NIPE, University of Minho
    Department of Economics and NIPE, University of Minho,)

Abstract

Productivity disparities in the European regions tend to persist. In order to understand the underlying sources of this phenomenon we assess the importance of science and regional innovation modes on firms’ productivity growth on a sample of 150,712 firms across 161 NUTSII European regions, over the period 2012-2017. We find that science is a major source of firms’ productivity growth, and it has been particularly important to firms located in Southern Europe and, to less extent, in Eastern EU regions, indicating that a science-push convergence process is at work in the EU peripheral regions. Our findings also show that the fast-growing productivity firms are those who benefit more from external knowledge and innovation. Growth by imitation seems to be a viable strategy restricted to the slow-growing productivity firms. These results help to conciliate contentious evidence regarding firms’ benefits from spillovers, namely from scientific knowledge.

Suggested Citation

  • Natália Barbosa & Ana Paula Faria, 2023. "Science and productivity in European Firms: How do regional innovation modes matter?," GEE Papers 0175, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Jul 2023.
  • Handle: RePEc:mde:wpaper:0175
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    File URL: https://www.gee.gov.pt//RePEc/WorkingPapers/GEE_PAPERS_175.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Territorial innovation patterns; Firm productivity; Europe; Quantile regression;
    All these keywords.

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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