Competitiveness in Structurally Similar Regions: Why do they Perform Differently?

Abstract

Because competitiveness is crucial for sustained regional economic development, the European Union has sought to fuel innovation through cohesion policy funds. Research undertaking comparative socioeconomic analysis has emerged to support policy-makers in designing, monitoring and implementing Smart Specialization Strategies to better understand divergences in regional performance, especially in less-developed regions. Studies widely use the benchmarking approach, but a deeper understanding of heterogeneity among regions is needed. In this vein, this work aims to empirically analyse the factors that explain competitiveness in structurally similar regions. It also analyses the differences between them, focusing on a set of peripheral and lagging regions. The results reveal four influential indicators for competitiveness among these regions: human resources in science and technology, research and development expenditure, youth unemployment rate, and GDP per capita. Subgroups with differentiated profiles are also identified, particularly regarding variables linked to the knowledge economy and the labour market. These results contribute to the literature on the implementation of policies and highlight the need to tailor innovation policies, especially in regions suffering from the European innovation paradox.