Regional productivity in a multi-speed Europe

This paper examines productivity dynamics at different spatial scales across European countries. Application of non-parametric simultaneous estimation techniques to a hierarchical dataset permits us to consider explicitly the extent to which the national-level is important for understanding regional-level productivity variation. The results show considerable national and regional level productivity variation which is not constant and evolves over time. There is divergence at all spatial scales and groups of regions that follow different growth trajectories with group membership not being confined by national borders. The results imply that policymakers need to take cognizance of the multi-layered economic geographies in which they are located. There are also group dynamics that challenge the dominance of the national economic positions and should be considered when shaping policy.