Detecting economic growth pathways in the EU’s lagging regions

Abstract

ABSTRACT We analyse growth pathways of European Union NUTS-3 regions from 2003 to 2017. We focus on lagging regions, using a taxonomy based on income level and long-run growth rate that combines the Cohesion Policy classification with that proposed under the ‘Catching Up’ initiative. We find that lagging areas can sometimes be found within larger and more prosperous regions, especially in Western Europe. We analyse the role of industrial structure, innovation and inward foreign direct investments as growth drivers, and find that economic growth is associated with different economic dimensions in different types of regions. The NUTS-3 scale of analysis is helpful to inform the design and implementation of development strategies catering to different opportunities at this smaller geographical scale.