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COVID-19 is mostly considered to have ravaged places with high levels of inequality and poverty. Yet, in the case of Europe, the evidence for this is limited. In this paper we address this gap in our knowledge by exploring how regional variations in poverty, wealth and interpersonal inequality have shaped COVID-19-related excess mortality. The results show that during the first 18 months of the pandemic there is no link between inequality and poverty, on the one hand, and the lethality of the disease, on the other. The geographical concentration of wealthy people is related to more, not less, excess mortality. [ABSTRACT FROM AUTHOR]

Solitude is a rising phenomenon in the western world. The share of people affected by solitude has been rising for some time and the Covid-19 pandemic has further brought this trend to the fore. Yet, we know next to nothing about the aggregate subnational economic impact of the rise in solitude. In this paper, we analyse the consequences of solitude on regional economic performance across Europe, distinguishing between two of its key dimensions: alone living, proxied by the regional share of single-person households and loneliness, proxied by the aggregate share of social interactions. We find that solitude has important implications for economic development, but that these go in different directions. While alone living is a substantial driver of economic growth across European regions, high shares of lonely people undermine it. The connection of loneliness with economic growth is, however, dependent on the frequency of in-person meetings, with large shares of the population meeting others socially on a weekly basis, alongside a small percentage of people who never meet others, yielding the best economic returns. [ABSTRACT FROM AUTHOR]

Economic change over the past 20 years has rendered many individuals and territories vulnerable, leading to greater interpersonal and interterritorial inequality. This rising inequality is seen as a root cause of populism. Yet, there is no comparative evidence as to whether this discontent is the consequence of localised interpersonal inequality or stagnant growth in 'left-behind' places. This article assesses the association between levels and changes in local GDP per capita and interpersonal inequality, and the rise of far-right populism in Europe and in the USA. The analysis—conducted at small region level for Europe and county level for the USA—shows that there are both similarities and differences in the factors connected to populist voting on both sides of the Atlantic. In the USA, neither interpersonal inequality nor economic decline can explain populist support on their own. However, these factors gain significance when considered together with the racial composition of the area. Counties with a large share of white population where economic growth has been stagnant and where inequalities have increased supported Donald Trump. Meanwhile, counties with a similar economic trajectory but with a higher share of minorities shunned populism. In Europe, the most significant factor behind the rise of far-right populism is economic decline. This effect is particularly large in areas with a high share of immigration. [ABSTRACT FROM AUTHOR]

Why have some territories performed better than others in the fight against COVID‐19? This paper uses a novel dataset on excess mortality, trust and political polarization for 165 European regions to explore the role of social and political divisions in the remarkable regional differences in excess mortality during the first wave of the COVID‐19 pandemic. First, we investigate whether regions characterized by a low social and political trust witnessed a higher excess mortality. Second, we argue that it is not only levels, but also polarization in trust among citizens – in particular, between government supporters and non‐supporters – that matters for understanding why people in some regions have adopted more pro‐healthy behaviour. Third, we explore the partisan make‐up of regional parliaments and the relationship between political division – or what we refer to as 'uncooperative politics'. We hypothesize that the ideological positioning – in particular those that lean more populist – and ideological polarization among political parties is also linked to higher mortality. Accounting for a host of potential confounders, we find robust support that regions with lower levels of both social and political trust are associated with higher excess mortality, along with citizen polarization in institutional trust in some models. On the ideological make‐up of regional parliaments, we find that, ceteris paribus, those that lean more 'tan' on the 'GAL‐TAN' spectrum yielded higher excess mortality. Moreover, although we find limited evidence of elite polarization driving excess deaths on the left‐right or GAL‐TAN spectrums, partisan differences on the attitudes towards the European Union demonstrated significantly higher deaths, which we argue proxies for (anti)populism. Overall, we find that both lower citizen‐level trust and populist elite‐level ideological characteristics of regional parliaments are associated with higher excess mortality in European regions during the first wave of the pandemic. [ABSTRACT FROM AUTHOR]

The concept of regional development trap refers to regions that face significant structural challenges in retrieving past dynamism or improving prosperity for their residents. This article introduces and measures the concept of the regional development trap for regions in Europe. The concept draws inspiration from the middle-income trap in international development theory but widens it to shed light on traps in higher-income countries and at the regional scale. We propose indicators—involving the economic, productivity, and employment performance of regions relative to themselves in the immediate past, and to other regions in their respective countries and elsewhere in Europe—to identify regions either in a development trap or at significant near-term risk of falling into it. Regions facing development traps generate economic, social, and political risks at the national scale but also for Europe as a whole. [ABSTRACT FROM AUTHOR]

We analyse the investment-to-cash flow relationship in Europe using a sample of manufacturing small- and medium-sized enterprises (SME) over the period 2009–2016. We investigate the effect of regional institutional quality on the investment-to-cash flow sensitivity, finding that, although credit constraints remain a serious problem for European SMEs, high-quality regional institutions contribute to mitigate the dependency on internally-generated resources to finance new investments. Improvements in local institutional quality can therefore facilitate SMEs' access to credit – e.g. through inter-firm trade credit relationships –, but are insufficient to overcome the credit restrictions faced by European SMEs. [ABSTRACT FROM AUTHOR]

The introduction of smart specialization (S3) as a fundamental pillar of the 2014 reform of the EU cohesion policy is a significant strategic shift in European development intervention. S3 strategies aimed at mobilizing the economic potential of each country and region of the EU by allowing a more place‐based and bottom‐up approach to development. However, despite the salience that S3 has acquired in a short period of time, there has been no European‐wide evaluation of the extent to which S3 strategies truly reflect the economic characteristics and potential of the territories where they are being implemented. This article examines the characteristics of S3 strategies across Europe – by focusing on their development axes, economic or scientific domains and policy priorities – to assess whether this is the case. The results show that S3 strategies display a proliferation of objectives, a problem that particularly affects areas with weaker quality of government. Moreover, strategies are generally loosely connected with the intrinsic conditions of each region and mostly mimic what neighbouring areas are doing. The lack of more concise and focused S3 strategies is likely to undermine the effectiveness of what is, otherwise, a very interesting and worthwhile policy experiment. [ABSTRACT FROM AUTHOR]

Europe has witnessed a considerable labour productivity slowdown in recent decades. Many potential explanations have been proposed to address this productivity 'puzzle'. However, how the quality of local institutions influences labour productivity has been overlooked by the literature. This article addresses this gap by evaluating how institutional quality affects labour productivity growth and, particularly, its determinants at the regional level during the period 2003–2015. The results indicate that institutional quality influences regions' labour productivity growth both directly—as improvements in institutional quality drive productivity growth—and indirectly—as the short- and long-run returns of human capital and innovation on labour productivity growth are affected by regional variations in institutional quality. [ABSTRACT FROM AUTHOR]

This paper examines the uneven geography of COVID‐19‐related excess mortality during the first wave of the pandemic in Europe, before assessing the factors behind the geographical differences in impact. The analysis of 206 regions across 23 European countries reveals a distinct COVID‐19 geography. Excess deaths were concentrated in a limited number of regions—expected deaths exceeded 20% in just 16 regions—with more than 40% of the regions considered experiencing no excess mortality during the first 6 months of 2020. Highly connected regions, in colder and dryer climates, with high air pollution levels, and relatively poorly endowed health systems witnessed the highest incidence of excess mortality. Institutional factors also played an important role. The first wave hit regions with a combination of weak and declining formal institutional quality and fragile informal institutions hardest. Low and declining national government effectiveness, together with a limited capacity to reach out across societal divides, and a frequent tendency to meet with friends and family were powerful drivers of regional excess mortality. [ABSTRACT FROM AUTHOR]

This paper examines the relationship between credit constraints—proxied by the investment‐to‐cash flow sensitivity—and firm‐level economic performance— defined in terms of labor productivity—during the period 2009–2016, using a sample of 22,380 manufacturing firms from 11 European countries. It also assesses how regional institutional quality affects productivity at the level of the firm both directly and indirectly. The empirical results highlight that credit rationing is rife and represents a serious barrier for improvements in firm‐level productivity and that this effect is far greater for micro and small than for larger firms. Moreover, high‐quality regional institutions foster productivity and help mitigate the negative credit constraints–labor productivity relationship that limits the economic performance of European firms. Dealing with the European productivity conundrum thus requires greater attention to existing credit constraints for micro and small firms, although in many areas of Europe access to credit will become more effective if institutional quality is improved. [ABSTRACT FROM AUTHOR]

Some regions in Europe that have been heavily supported by the European Union's Cohesion Policy have recently opted for parties with a strong Eurosceptic orientation. The results at the ballot box have been put forward as evidence that Cohesion Policy is ineffective for tackling the rising, European-wide wave of discontent. However, the evidence to support this view is scarce and often contradictory. This paper analyses the link between Cohesion Policy and the vote for Eurosceptic parties. It uses the share of votes cast for Eurosceptic parties in more than 63,000 electoral districts in national legislative elections in the EU-28 to assess whether Cohesion Policy investment since the year 2000 has made a difference for the electoral support for parties opposed to European integration. The results indicate that Cohesion Policy investment is linked to a lower anti-EU vote. This result is robust to employing different econometric approaches, to considering the variety of European development funds, to different periods of investment, to different policy domains, to shifts in the unit of analysis and to different levels of opposition by parties to the European project. [ABSTRACT FROM AUTHOR]

European nations allocate public sector resources with the general aim of increasing the well-being and welfare of their citizens through a fair and efficient distribution of these public goods and services. However, "who" delivers these goods and services and "how well" they are delivered are essential in determining outcomes in terms of well-being. Drawing on data from the European Social Survey database, this paper uses Amartya Sen's social welfare index framework—accounting for the trade-off between the maximization of public sector resources and an equitable distribution of these resources—to examine the influence of political decentralisation ("who" delivers the resources) and whether this influence is moderated by governance quality ("how well" they are delivered) on individual subjective well-being. The findings of the econometric analysis reveal that decentralisation does not always lead to higher well-being, as the benefits of political decentralisation are highly mediated by the quality of national governance. In countries with high governance quality, political decentralisation results in a greater satisfaction with health provision, while in lower quality governance countries, a more decentralized government can increase the overall satisfaction with life, the economy, government, democracy and the provision of education, but not necessarily with health-related services. [ABSTRACT FROM AUTHOR]

ABSTRACT Transport infrastructure investment is a cornerstone of growth-promoting strategies. However, the link between infrastructure investment and economic performance remains unclear. This may be a consequence of overlooking the role of government institutions. This paper assesses the connection between regional quality of government and the returns of different types of road infrastructure in the regions of the European Union. The results unveil the influence of regional quality of government on the economic returns of transport infrastructure. In weak institutional contexts, investment in motorways-the preferred option by governments-yields significantly lower returns than the more humble secondary road. Government institutions also affect the returns of transport maintenance investment. [ABSTRACT FROM AUTHOR]

The article discusses the urban and regional consequence of the financial crises in Europe caused by the failure of the banking system in the U.S. The global credit crunch triggered a major contraction in economic growth wherein many European countries struggled to recover. The crisis in Europe varied among countries, which exposed major disparities in economic weakness, recovery, resilience, stability and viability of the European Union.

This paper explores the relationship between social capital and happiness both in Europe as a whole, as well as in its four main geographical macro-regions-North, South, East and West-separately. We test the hypothesis of whether social capital, in its three-fold definition established by Coleman (Am J Sociol 94:S95-S120 )-trust, social interaction, and norms and sanctions-influences individual happiness across European countries and regions. The concept of social capital is further enriched by incorporating Putnam (Making democracy work-civic traditions in modern Italy. Princeton University Press, Princeton, ) and Olson (The rise and decline of nations-economic growth, stagflation, and social rigidities. Yale University Press, New Haven and London, ) type variables on associational activity. Using ordinal logistic regression analysis on data for 48,583 individuals from 25 European countries, we reach three main findings. First, social capital matters for happiness across the three dimensions considered. Second, the main drivers of the effects of social capital on happiness appear to be informal social interaction and general social, as well as institutional trust. And third, there are significant differences in how social capital interacts with happiness across different areas of Europe, with the connection being at is weakest in the Nordic countries. [ABSTRACT FROM AUTHOR]

ABSTRACT This paper delves into the factors, which determine the attractiveness of regions in Europe for migrants. Contrary to the literature on the United States, which has increasingly focused on the role of amenities, existing research in Europe tends to highlight the predominance of economic conditions as the main drivers of migration. Differentiating between economic, sociodemographic and amenity-related territorial features, we examine the appeal of various regional characteristics for migrants by analyzing net migration data for 133 European regions between 1990 and 2006. Our results show that, in addition to economic, human capital-related and demographic aspects, network effects and-in contrast to existing literature-different types of regional amenities exert an important influence on the relative attractiveness of sub-national territories across the European Union. Our findings therefore indicate that locational choices in Europe may be much more similar to place-based preferences in the United States than originally thought. [ABSTRACT FROM AUTHOR]

The analysis of clusters has attracted considerable interest over the last few decades. The articulation of clusters into complex networks and systems of innovation—generally known as regional innovation systems—has, in particular, been associated with the delivery of greater innovation and growth. Despite the growing economic and policy relevance of clusters, little systematic research has been conducted into their association with other factors promoting innovation and economic growth. This article addresses this issue by looking at the relationship between innovation and economic growth in 152 regions of Europe during the period between 1995 and 2006. Using an econometric model with a static and a dynamic dimension, the results of the analysis highlight that (1) regional growth through innovation in Europe is fundamentally connected to the presence of an adequate socioeconomic environment and, in particular, to the existence of a well-trained and educated pool of workers; (2) the presence of clusters matters for regional growth but only in combination with a good social filter, and this association wanes in time; (3) more traditional research and development variables have a weak initial connection to economic development, but this connection increases over time and is, once again, contingent on the existence of adequate socioeconomic conditions. [ABSTRACT FROM AUTHOR]

Rodríguez-Pose A. and Tselios V. Individual earnings and educational externalities in the European Union, Regional Studies. This paper examines whether differences in educational externalities affect individual earnings across regions in the European Union. Using microeconomic data from the European Community Household Panel, it resorts to spatial economic analysis in order to determine to what extent differences in individual earnings are the result of (1) the educational attainment of the individual, (2) the educational attainment of the other members of the household in which he/she lives, (3) the educational endowment of the region where the individual lives, or (4) the educational endowment of the neighbouring regions. The results highlight that, in addition to the expected positive returns of personal educational attainment, place-based regional and supra-regional educational externalities generate significant pecuniary benefits for workers. These findings are robust to the inclusion of different individual, household, and regional control variables. Rodríguez-Pose A. et Tselios V. Les gains individuels et les effets externes de l'éducation dans l'Union européenne, Regional Studies. Cet article cherche à examiner si, oui ou non, les différents effets externes de l'éducation influent sur les gains individuels à travers les régions de l'Union européenne. Employant des données microéconomiques provenant du European Community Household Panel (échantillon permanent des foyers de l'Union européenne), on a recours à une analyse économique spatiale afin de déterminer jusqu'à quel point les écarts des revenus individuels s'expliquent par (1) la réussite scolaire de l'individu, (2) par la réussite scolaire des autres membres du foyer, (3) par la dotation en équipement scolaire de la région où habite l'individu, ou bien (4) par la dotation en équipement scolaire des régions voisines. En plus des rendements positifs prévus de la réussite scolaire de l'individu, les résultats soulignent les avantages pécuniaires non-négligeables pour les travailleurs des effets externes régionaux et suprarégionaux de l'éducation qui sont basés sur l'endroit. Ces résultats s'avèrent robustes quand on inclut des variables de contrôle différentes pour l'individu, le foyer et la région. Gains individuels?Réussite scolaire?Effets externes?Foyers?Régions?Europe Rodríguez-Pose A. und Tselios V. Individuelles Einkommen und Bildungsexternalitäten in der Europäischen Union, Regional Studies. In diesem Beitrag wird untersucht, ob sich die Unterschiede bei den Bildungsexternalitäten auf das individuelle Einkommen in verschiedenen Regionen der Europäischen Union auswirken. Ausgehend von mikroökonomischen Daten des Haushaltspanels der Europäischen Gemeinschaft wird eine räumliche Wirtschaftsanalyse durchgeführt, um festzustellen, in welchem Umfang die Unterschiede bei den individuellen Einkommen auf (1) den Bildungsgrad der Person, (2) den Bildungsgrad der anderen Mitglieder des Haushalts dieser Person, (3) den Bildungsstand der Region, in der die Person lebt, oder (4) den Bildungsstand der angrenzenden Regionen zurückzuführen sind. Aus den Ergebnissen geht hervor, dass zusätzlich zu den erwarteten positiven Ergebnissen des persönlichen Bildungsgrades auch die ortsgebundenen regionalen und supraregionalen Bildungsexternalitäten für die Arbeitnehmer mit signifikanten finanziellen Vorteilen verbunden sind. Diese Ergebnisse bleiben auch bei Berücksichtigung verschiedener individueller, Haushalts- und regionaler Kontrollvariablen robust. Individuelles Einkommen?Bildungsgrad?Externalitäten?Haushalte?Regionen?Europa Rodríguez-Pose A. y Tselios V. Ingresos individuales y externalidades educativas en la Unión Europea, Regional Studies. En este artículo se examina si las diferencias de las externalidades educativas entre las regiones de la UE influyen sobre los ingresos económicos de los individuos. Mediante un análisis económico de carácter espacial y utilizando datos microeconómicos provenientes de la Encuesta Europea de Familias se intenta determinar si las diferencias de los ingresos entre individuos en distintas regiones de la UE son el resultado de (1) el nivel educativo de cada individuo, (2) el nivel educativo de los demás miembros de la unidad familiar, (3) el nivel educativo de la región en la que se vive o (4) el nivel educativo de las áreas vecinas. Los resultados demuestran que, además de los rendimientos positivos ligados al nivel personal de formación, las externalidades geográficas de carácter regional y supra-regional generan importantes beneficios pecuniarios para los trabajadores. Estos resultados son sólidos para la inclusión de distintas variables de control de tipo individual, familiar y regional. Ingresos individuales?Nivel de formación?Externalidades?Unidades familiares?Regiones?Europa [ABSTRACT FROM PUBLISHER]

Rapid economic convergence in Central and Eastern European (CEE) countries has not been matched by a similarly rapid increase in life satisfaction. This paper sets out to address this conundrum, by looking at the individual and macro-level determinants of individual life satisfaction in 10 CEE countries. The results highlight that macroeconomic and institutional differences are the key factors behind the lack of convergence in life satisfaction. On the macroeconomic side, Gross Domestic Product growth is still a source of increasing well-being, but the happiness bonus associated with it is becoming smaller. The different levels of individual happiness in CEE are therefore mostly determined by institutional factors such as corruption, government spending and decentralization. [ABSTRACT FROM AUTHOR]

The geography of education, especially at subnational level, is a huge black box. Little is known about the distribution of educational attainment and inequality across regions in Europe. This paper addresses this gap in the literature by mapping educational attainment and inequality in 102 regions in Western Europe, using data extracted from the European Community Household Panel (ECHP) covering more than 100,000 individuals over the period 1995–2000. The results of this Exploratory Spatial Data Analysis (ESDA) reveal a strong correlation between levels of educational attainment and inequality across regions in Europe. Regions with similar educational conditions tend to cluster, often within national borders. In addition, a North–South and an urban–rural dimension are evident. Northern regions and large European metropoli have not only the most-educated labour force but also the lowest levels of inequality. Educational inequality seems to be, in any case, a fundamentally within-region phenomenon: 90 percent of the educational inequality in Europe occurs among individuals living in the same region. [ABSTRACT FROM AUTHOR]

This paper uses microeconomic data for more than 100,000 European individuals in order to analyse whether the individual economic returns to education vary between migrants and non-migrants and whether any differences in earnings between these two groups are affected by household and/or geographical (regional and interregional) externalities. The results point out that while education is a fundamental determinant of earnings, European labour markets do not discriminate in the returns to education between migrants and non-migrants. Household, regional and supra-regional externalities influence the economic returns to education in a similar way for local, intranational and supra-national migrants. The results are robust to the introduction of a large number of individual, household and regional controls. [ABSTRACT FROM AUTHOR]

Does inequality matter for regional growth? This paper addresses this question, using regionally aggregated microeconomic data for more than 100,000 individuals over a period of 6 years. The aim is to examine the relationship between income and educational distribution and regional economic growth in western Europe. Our results indicate that, given existing levels of inequality, an increase in a region’s income and educational inequality has a significant positive association with subsequent economic growth. Educational achievement is positively correlated with economic growth, but the impact of initial income levels is unclear. Finally, the results suggest that inequalities in educational attainment levels matter more for economic performance than average educational attainment. The above findings are not only robust to the definition of income distribution, but also across inequality measurements. [ABSTRACT FROM AUTHOR]

The majority of the literature on fiscal decentralization has tended to stress that the greater capacity of decentralized governments to tailor policies to local preferences and to be innovative in the provision of policies and public services, the greater the potential for economic efficiency and growth. There is, however, little empirical evidence to substantiate this claim. In this paper we examine, using a panel data approach with dynamic effects, the relationship between the level of fiscal decentralization and economic growth rates across 16 Central and Eastern European countries over the 1990–2004 period. Our findings suggest that, contrary to the majority view, there is a significant negative relationship between two out of three fiscal decentralization indicators included in the analysis and economic growth. However, the use of different time lags allows us to nuance this negative view and show that long-term effects vary depending on the type of decentralization undertaken in each of the countries considered. While expenditure at and transfers to sub-national tiers of government are negatively correlated with economic growth, taxes assigned at the sub-national level evolve from having a significantly negative to a significantly positive correlation with the national growth rate. This supports the view that sub-national governments with their own revenue source respond better to local demands and promote greater economic efficiency [ABSTRACT FROM AUTHOR]

This study investigates the patterns of corporate mergers and acquisitions (M&As) involving firms located in the EU25 as well as in the four EFTA countries between 1998 and 2003. Against the background of a reflection on the concept of the firm in economic geography, it uncovers the cross-border balance of M&As across European states and identifies the factors that may explain the levels and patterns of corporate takeovers across Europe. The results indicate that the traditional motives of access to new and core markets, the effects of geographical proximity, and the internalisation of localised capabilities (proxied by a skilled and innovative labour pool) represent the key drivers of European M&As, while institutional factors, such as European integration or language barriers, appear to be less influential. [ABSTRACT FROM AUTHOR]

Rodríguez-Pose A. and Crescenzi R. Research and development, spillovers, innovation systems, and the genesis of regional growth in Europe. Regional Studies. Research on the impact of innovation on regional economic performance in Europe has fundamentally followed three approaches: (1) the analysis of the link between investment in research and development (R&D), patents, and economic growth; (2) the study of the existence and efficiency of regional innovation systems; and (3) the examination of the geographical diffusion of regional knowledge spillovers. These complementary approaches have, however, rarely been combined. Important operational and methodological barriers have thwarted any potential cross-fertilization. This paper tries to fill this gap in the literature by combining in one model R&D, spillovers, and innovation systems approaches. A multiple regression analysis is conducted for all regions of the group of 25 European Union countries (EU-25), including measures of R&D investment, proxies for regional innovation systems, and knowledge and socio-economic spillovers. This approach allows the discrimination between the influence of internal factors and external knowledge and institutional flows on regional economic growth... [ABSTRACT FROM AUTHOR]

Recent research has highlighted that in the last few years, the evolution of regional disparities in many European states has become pro-cyclical. This represents a change with respect to the predominantly anti-cyclical pattern of the 1960s and 1970s. This paper addresses the question of whether and when this change has taken place in the southern periphery of Europe, before analysing the factors that may have played a role in such a change. The analysis relies on a regional database that includes the evolution of the GDP per capita of NUTS II regions in five European countries (France, Greece, Italy, Portugal, and Spain) between 1980 and 2000. The results of the analysis support the hypothesis of a change towards a pro-cyclical evolution of regional disparities in the cases of Italy, Portugal, and Spain, but not in those of Greece and France. A relationship between these pro-cyclical patterns and the emergence of less dynamic sheltered economies is also detected in peripheral regions. This lack of dynamism is related to the fact that numerous peripheral areas in southern Europe have become increasingly dependent on factors such as transfers or public investment and employment, and therefore are less exposed to changes in market conditions. [ABSTRACT FROM AUTHOR]