Spatial Disparities in Productivity and Industry Mix

Abstract

This paper applies non-parametric techniques to examine the evolution of the distribution of regional productivity in the European Union between 1977 and 1999. Likewise, we study the strength of the respective roles played by regional and sectoral factors in the convergence in productivity observed in the European context. To achieve this aim, we consider a new methodology involving a modification of conventional shift-share analysis and various theoretical results obtained in the literature on personal income distribution. Our findings suggest that regional inequality in productivity is closely linked to intrinsic differences between regions. Similarly, the analysis carried out reveals the major role played by the national component and spatial dimension in the explanation of regional disparities in product per worker in the European Union. In addition, our results support the relevance of one-sector growth models for analysing regional disparities in per-capita income.