Sectoral specialization and productivity in European metropolitan regions: empirical insights and policy implications

Abstract

This article presents new empirical insights into European metropolitan regions, addressing a gap in the existing literature by examining the sectoral specialization and its impact on the productivity growth of metropolitan regions. The lack of evidence for European metropolitan regions contrasts with the empirical evidence for U.S. metropolitan regions, highlighting a significant research gap. By employing panel-regression analysis and leveraging unique regional data encompassing European metropolitan regions from 2000 to 2020, the authors unveil a multitude of significant findings. Key findings are that higher income countries (EU-15) tend to experience greater benefits from sectoral specialization in metropolitan regions compared to Eastern European regions (EU-NMS), suggesting that generalizing conclusions for EU-27 may be misleading. The study reveals a productivity gap resulting from sectoral specialization between metropolitan and non-metropolitan regions: Results suggest a higher concentration of specialized sectors in metropolitan regions. Policy implications are highlighted within the discussion on the framework of smart specialization in the context of metropolitan regions.