Abstract

Summary The diffusion of spillovers in the EU regions has often been discussed in recent years. Many studies have dealt with the issue of convergence and divergence. However, the theoretical explanation of spillovers and the effects of the integration on regional interaction have usually been neglected. On the basis of endogenous growth theory we develop a regional production function that explains production with technical knowledge, human capital and regional spillovers. A subsequent spatial econometric analysis shows that the effects of the European integration process on international spillovers are too weak to be proved empirically. The fundamental steps in the integration process carried out in the last fifteen years (single market, monetary union, etc.) have not developed their effectiveness perceptible in respect of regional cooperation so far. From a growth theoretical perspective it is not out of question that it may take several decades before spillovers across neighbouring intercountry EU regions will be measurable.

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