Spatial knowledge spillovers and regional productivity growth in Europe

The aim of this paper is to investigate the effects that technological knowledge spillovers at different spatial levels (that is, local, national, and international), have had on labor productivity dynamics in the manufacturing industries in European regions between 1980 and 1992. In particular, adopting a modified version of a 'catching-up' equation and using an enlarged version of Eurostat's REGIO database, we empirically assess whether these spatial dimensions are possible explanatory factors for the labor productivity growth of firms located in European regions. We examine eventual trade-offs between local (regarding the transfer of 'tacit' knowledge) and global (regarding the diffusion of fully 'codified' knowledge) pressures as possible determinants of the growth in manufacturing productivity at regional level in Europe between 1980 and 1992.