Human Capital, Technology Diffusion and Total Factor Productivity Growth in Regions

17  September 2018    3:00 pm CEST

Anja Kukuvec, Vienna University of Economics and Business (WU)

In cooperation with:


wiiw, Rahlgasse 3, 1060 Vienna


Until recently, the geographical coverage of data sets on the sub-national level was usually rather limited and hardly included regions of less developed economies. Considering new regional data collection, this has started to change, thereby paving the way for new regional growth analysis. Employing such an extensive data set, this paper investigates the role of human capital and technology spillovers on regional total factor productivity growth for 569 regions in 30 countries. Nonlinearities in the effects of the explanatory variables as well as spatial spillovers caused by a spatial autoregressive process of the dependent variable and the explanatory variables are considered in the estimation model. The findings confirm a robust direct impact of technological catch-up on regional total factor productivity growth, where the catch-up speed increases with increasing levels of human capital. This supports the common hypothesis of an educated labor force enhancing technology adoption from abroad. Furthermore, positive spatial spillovers of technology levels are observed.