Recent theoretical advances have emphasised the importance of localised increasing returns to scale in understanding both the regional growth and agglomeration processes. However, considerable empirical controversy still exists over whether returns to scale are constant or increasing....

Using data envelopment analysis, we calculate indices of total factor productivity (TFP), efficiency and technological change for the manufacturing sectors of 68 European NUTS1 regions over the period 1986-2002. We subsequently examine these indices using exploratory spatial data analysis (ESDA)...