European Regional Productive Performance under a Metafrontier Framework. The role of patents and human capital on technology gap?

Assessing regional convergence is an important issue both at the national and at the supranational level, such as the level of European regions. Regional convergence and productivity growth are also principles of the European regional policy. This paper studies regional productivity convergence among 232 NUTS-2 European regions for the period 2003-2011. Despite the European regional policies implemented in the last two decades, the technology gap between European regions has only increased. The objective of this paper is to provide new evidence on production efficiency and the technology gap in European regions. We present a two-stage model of regional productive performance using a meta-frontier framework and a PVAR analysis. The main conclusion is that there exist significant differences in productive performance that confirm the North-South division in Europe. Finally, the results from the PVAR model provide robust evidence for the role played by human capital and innovation activity through patent realization in the technology gaps at the regional level in Europe.