Work

Quality of government and social capital as drivers of regional diversification in Europe

Year: 2017

Type: article

Abstract: Industrial diversification is crucial for economies to prosper. Recent studies have shown that regional economies tend to diversify into sectors that are related to those already present in the region. However, no study yet has investigated the impact of regional institutions. The objective of the article is to analyze how formal and informal institutions influence regional diversification. Studying 118 European regions in the period 2004–2012, we find evidence that institutions, and especially bridging social capital, matter for regions to diversify into new industries. Our results suggest that regional institutions relevant for diversification in regions are predominantly informal in character rather than formal, and bridging rather than bonding.

Source: Journal of Economic Geography

DOI: 10.1093/jeg/lbx001

Authors: Nicola Cortinovis, Jing Xiao, Ron Boschma, Frank G van Oort

Institutions: Erasmus University Rotterdam, Lund University, Utrecht University

Language: English

Topic: Economic and Technological Innovation

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Industry, innovation and infrastructure, Decent work and economic growth

Open Access status: bronze

Funder: Joint Programming Initiative Urban Europe