Pavel Bednář

Department of Regional Development Public Administration and Law, Faculty of Management and Economics, Tomas Bata University in Zlín

Czech Republic 

bednar@fame.utb.cz

Innovation performance and R&D expenditures in Western European regions: Divergence or convergence?

Martina Halásková

Department of Public Economics, Faculty of Economics, VŠB-Technical University of Ostrava

Czech Republic 

martina.halaskova@vsb.cz

Abstract. Although Western Europe is a global leader in innovation activities among the OECD countries, these activities are not distributed evenly across NUTS 2 regions. Thus, the analysis of convergence or divergence related to innovation performance and R&D expenditures among Western European NUTS 2 regions is posed as the aim of this paper. Applying differential local version of spatial autocorrelation (LISA), difference-in-difference estimation the paper reveals the local variation of convergence and divergence and general spatial regime divergence in innovation performance and R&D expenditures within Western European NUTS 2 regions. Moreover, spatial lag cross-sectional regression provides support to the consideration of R&D expenditures as determinant for innovation performance along with the continuing divergence between most of Western and Southern European NUTS 2 regions and the others. Thus, the results confirm the stability in innovation performance and R&D expenditures in Western European NUTS 2 regions which could be the source of lagging behind not only other OECD countries but BRICS countries as well. On the regional level several NUTS 2 regions demonstrated the convergence dynamics, however, the general spatial divergence regime should lead to more actions regarding R&D polices under the EU programming period of 2014-2020.

Received: May, 2017

1st Revision: August, 2017

Accepted: November, 2017

DOI: 10.14254/2071-8330.2018/11-1/16

JEL Classification: C21, C22, O30, O52, R12

Keywords: European regions, expenditures, innovation, performance, research and development, spatial econometrics, Western Europe