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We analyse binding constraints to productivity growth in the UK's regions outside London and the greater South East. These analyses challenge a number of common arguments about the UK's regional economic inequality problem. We find little evidence consistent with the hypotheses (i) that low shares of university graduates remain the primary constraint on growth for the UK's regions; (ii) that there is a generalised issue with access to finance for firms outside the South East; or (iii) that low or falling regional migration rates are to blame for the persistence of the UK's regional economic inequalities. Instead, we find evidence consistent with (i) a specific relative shortage of STEM degrees; (ii) binding transport infrastructure constraints within major non-London conurbations; (iii) a failure of public innovation policy to support clusters beyond the South East, in particular through the regional distribution of public support for Research and Development (R&D); and (iv) missed opportunities for higher internal mobility due to London's overheating housing market. We also find some suggestive evidence consistent with constraints on access to early-stage equity financing for high-growth-potential SMEs in certain regions. [ABSTRACT FROM AUTHOR]

Despite the importance of interregional trade for building effective regional economic policies, there are very few hard data to illustrate such interdependencies. We propose here a novel research framework to predict interregional trade flows by utilizing freely available Web data and machine learning algorithms. Specifically, we extract hyperlinks between archived Websites in the United Kingdom and we aggregate these data to create an interregional network of hyperlinks between geolocated and commercial Web pages over time. We also use existing interregional trade data to train our models using random forests and then make out-of-sample predictions of interregional trade flows using a rolling-forecasting framework. Our models illustrate great predictive capability with R2 greater than 0.9. We are also able to disaggregate our predictions in terms of industrial sectors, but also at a subregional level, for which trade data are not available. In total, our models provide a proof of concept that the digital traces left behind by physical trade can help us capture such economic activities at a more granular level and, consequently, inform regional policies. [ABSTRACT FROM AUTHOR]

This paper examines the heterogeneous effect of student spending in UK NUTS-2 regions. Impact analyses of the more than £45 billion students spend each year have so far been agnostic of the regional absorptive capacity to benefit from this expenditure. Building a multi-regional input–output model for the UK and combining it with data on student expenditure, domicile and level of study, the paper finds significant regional heterogeneity in gross value added and employment multipliers as well as in interregional spillovers. The analysis shows how important student expenditure is for regional economies and the symbiotic relationship between student spending and regional industrial structures that produce varying impact outcomes. [ABSTRACT FROM AUTHOR]