Regional differences in technology : theory and empirics

Abstract

The aim of this paper is, on the one hand, to give a review of several streams in the litera-ture which differ with respect to the extent they assume knowledge to spread over regions. On the other hand, this paper shows the extent to which these theories are supported empirically. The regional neoclassical growth model focuses on the immediate diffusion of technological knowledge. Alternative theories like cumulative causation and imperfect diffusion theories focus on the issue that technology gaps between regions will persist over time. Cumulative causation assumes that there exists no diffusion of knowledge, while imperfect diffusion theories assume that diffusion will take place, though slowly. These theoretical insights lead to several testable hypotheses on the presence and the development over time of regional technology gaps. This paper attempts to use a new set of data on R&D in the European Union to explore this field. Evidence from regional R&D statistics will be used to highlight differences in technological activity between the regions within the leading European economies. Also the factors that are proposedly related to the relative technological activity of a region are analysed, in addition to the long term implications of technology gaps.