Abstract:

Regions need to promote their own growth by mobilizing local assets and resources to capitalize on their specific competitive advantages, rather than depending on national transfers and subsidies to help them grow. Traditional policies are not sufficient and a more comprehensive policy is called for, one that integrated infrastructure and education in a coordinated agenda across levels of government and that foster business development and innovation. Objective: This paper aims to look into the determinant role of innovation at regional level for potentially explaining the variations in growth among regions in Europe. The paper provides in the first section a literature review on existing studies related to regional development and innovation. The second section provides a brief description of the methodology and continues with the results before concluding. Prior work: The paper draws upon previous similar work done around the world. Approach: To undertake the research, data available from EUROSTAT Enterprise Survey was used to run regressions and test models to identify the role of innovation on regional economic growth. Main Results: The main results showed that innovation positively affects growth as endogenous growth theory suggests. Implications: this study can constitute the basis for understanding the concept of innovation in relation to regional economic growth and further research. Value: This paper is analyzing the role of innovation in relation to growth at the level of the most recent European countries and contributes to the existing literature.