Economic Growth, Convergence and Innovation in the EU Regions

  • Tiiu Paas
  • Triin Vahi
Keywords: regional disparities, convergence, innovation, policy implications


The paper focuses on quantitative assessment of the innovation’s role in explaining regional disparities and convergence in Europe. The empirical part of the study bases on the regional GDP pc and innovation indicators on the EU-27 NUTS2 level regions. Based on the selected set of initial regional innovation indicators and using the principal components factor analysis method, three composite indicators of regional innovation capacity are extracted. Estimating convergence equations, we noticed that regional innovations tend to increase inter-regional differences, at least during the short-run period. Thus, if regional income convergence is a policy target, additional policy measures beside innovation activities should be effectively implemented.


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Author Biographies

Tiiu Paas
University of Tartu
Triin Vahi
University of Tartu
How to Cite
Paas, T., & Vahi, T. (1). Economic Growth, Convergence and Innovation in the EU Regions. Estonian Discussions on Economic Policy, 20(1).
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