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Economic Growth and Change

Economic Growth and Change

National and Regional Patterns of Convergence and Divergence

Edited by John Adams and Francesco Pigliaru

The pursuit of economic growth is at the top of every nation’s policy agenda at the end of the 20th century. This authoritative and comprehensive book goes beyond the narrowly-based convergence model of economic growth by considering global, national and regional patterns of growth from a comparative perspective.

Chapter 9: European 'regional clubs': do they exist, and where are they heading? On economic and technological differences between European regions

Bart Verspagen

Subjects: development studies, development economics, economics and finance, development economics, regional economics


Page 236  9. European ‘regional clubs’: do they exist, and where are they heading? On economic and technological differences between  European regions  Bart Verspagen*  9.1 INTRODUCTION: TECHNOLOGICAL CHANGE IN REGIONS  Economists have always identified technological change as the prime factor behind economic growth. There are, however, clear differences between different ways in  which economists from different theoretical perspectives have looked at the way in which technological change ‘works’. In traditional growth theory (Solow, 1956,  1970), technology is supplied as an exogenous public good. Countries, regions or firms are seen as entities, which, at least in the long run, can all make use of the same  technology. Not surprisingly, the prediction of this theory is that growth paths of different countries or regions will (unconditionally) converge to each other.  In the recent so­called ‘new growth theory’, technology becomes a partly private and partly public good. For example, in Romer (1990), technological inventions can  be patented by firms, which gives them the exclusive right to produce new (intermediate) goods, but, at the same time, inventions generate new ‘general knowledge’,  which is freely available to all firms. This approach typically leads to ‘endogenization’ of steady­state growth rates of countries and, hence, convergence becomes  ‘conditional’ on the factors endogenously determining this growth rate.  In the view of a group of economists identifying themselves as ‘Schumpeterians’ (for example, Dosi, 1988), technological change is characterized by strong tendencies  for cumulativeness, implying that not all firms (or countries, or regions) are equally well placed to...

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