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This paper looks at the divergent economic trajectories of Barcelona and Madrid since Spain's transition to democracy. It highlights how Barcelona, the city that was better positioned four decades ago to emerge as the main Spanish economic hub, has lost out to Madrid. We argue that the contrasting trajectories of the two cities have less to do with the pull of Madrid as the capital of Spain, with the development of new infrastructure in the country, or with agglomeration economies, and more with institutional factors. A growing societal divide in Barcelona along economic, social, and identity lines has led to a greater breakdown of trust and to the development of strong groups with limited capacity to bridge with one another than in Madrid. This has entailed the emergence of negative externalities that have limited the economic potential for growth in Barcelona and facilitated the rise of Madrid as the main economic hub within Spain. [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]

The on-going COVID-19 crisis demonstrates how interlinked and networked our globalized society has become. Overall, the special issue advances our knowledge of nodes in global networks by further investigating the particularities of such nodes, drawing conclusions on both the nodes themselves and the networks they are involved in. Yet, there are also examples of gateway cities serving as engines of peripheral growth (Scholvin, 2017), which indicates that considerably more research is needed to fully understand nodes in global networks from this particular angle. These functions are not necessarily additive, meaning that gateways are diverse - both in terms of the role they play in global networks and regarding their spatial range (Breul, 2019; Breul & Revilla Diez, 2017; Scholvin, 2020a). [Extracted from the article]

Entrepreneurship is often seen as the cure-all solution for poverty reduction. Proponents argue that it leads to job creation, higher incomes and lower poverty rates in the cities in which it occurs. Others argue that many entrepreneurs are actually creating low-productivity firms serving local markets. Yet, despite this debate, little research has considered the impact of entrepreneurship on poverty in cities. This paper addresses this gap using a panel of US cities for the period between 2005 and 2015. We hypothesize that the impact of entrepreneurship will depend on whether it is in tradeable sectors, so likely to have positive local multiplier effects, or non-tradeable sectors, which may saturate local markets. We find that entrepreneurship in tradeables reduces poverty and increases incomes for non-entrepreneurs, a result we confirm using an instrumental variable approach, taking the inheritance of entrepreneurial traits as the instruments. In contrast, while there are some economic benefits from non-tradeable entrepreneurship, we find these are not large enough to reduce poverty. [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]

This paper assesses whether both the levels and the degree of change in government quality influence regional economic performance in the European Union and, in particular, in its lagging regions. The results of the econometric analysis, covering 249 NUTS-2 regions for the period 1999-2013, suggest that (1) government quality matters for regional growth; (2) relative improvements in quality of government are a powerful driver of development; (3) one-size-fits-all policies for lagging regions are not the solution; (4) government quality improvements are essential for low-growth regions; and (5) in low-income regions basic endowment shortages are still the main barrier to development. In particular, low-growth regions in Southern Europe stand to benefit the most from improvements in government quality, while in low-income regions of Central and Eastern Europe, investments in the traditional drivers of growth remain the main factors behind successful economic trajectories. [ABSTRACT FROM AUTHOR]

Support for parties opposed to European Union (EU) integration has risen rapidly, and a wave of discontent has taken over the EU. This discontent is purportedly driven by the very factors behind the surge of populism: differences in age, wealth, education, or economic and demographic trajectories. This paper maps the geography of EU discontent across more than 63,000 electoral districts in the EU-28 and assesses which factors push anti-EU voting. The results show that the anti-EU vote is mainly a consequence of local economic and industrial decline in combination with lower employment and a less educated workforce. Many of the other suggested causes of discontent, by contrast, matter less than expected, or their impact varies depending on levels of opposition to European integration. [ABSTRACT FROM AUTHOR]

The role of cities in fostering innovation has for long been taken for granted. Agglomeration and the knowledge spillovers generated in dense urban environments have been considered fundamental drivers of innovation. This view has, however, become challenged by research questioning the returns to physical agglomeration and local networking, placing instead more emphasis on the importance of interregional and international collaboration, and on innovation in peripheral regions. This paper delves into the debate on the role of cities for innovation by examining the interplay between urban location and local collaboration in Norway. It uses data from the Community Innovation Survey for 2006–2010 to map out the geographical dimension of R&D collaboration in Norwegian firms with a view to assessing whether different types of R&D collaboration in urban and rural locations affect firms' propensity to innovate. The results show that local collaboration is associated with increased process and organisational innovation, while it does not produce higher levels of product or marketing innovation. Conversely, international collaboration is connected with higher probabilities of product, new‐to‐market and marketing innovations. Furthermore, location in urban or rural areas makes no difference for most innovation outcomes in Norway when other characteristics are controlled for. Location in cities also does not shape the returns to local R&D collaboration. Hence, the role of cities for innovation in Norway, whether in themselves or as sites for dense local interaction, is less relevant than the urban innovation literature would predict. [ABSTRACT FROM AUTHOR]