Total Factor Productivity, Intangible Assets and Spatial Dependence in the European Regions

D<sc>ettori</sc> B., M<sc>arrocu</sc> E. and P<sc>aci</sc> R. Total factor productivity, intangible assets and spatial dependence in the European regions, <italic>Regional Studies</italic>. The aim of this paper is to analyse the determinants of the efficiency levels across the European regions. Firstly, a regression-based measure of regional total factor productivity is derived by estimating a spatial Cobb--Douglas production function. Secondly, the role played by intangible factors (human capital, social capital and technological capital) on total factor productivity levels is investigated by applying the spatial two-stage least-squares (2SLS) method and the spatial heteroskedasticy and correlation consistent (SHAC) estimator to account for both heteroskedasticity and spatial autocorrelation. It turns out that a large part of total factor productivity differences across the European regions is explained by disparities in the endowments of these intangible assets.