Regional Competitiveness - Startseite · Europe 2020 Regional Index (Athanasoglou & Dijkstra,...
Transcript of Regional Competitiveness - Startseite · Europe 2020 Regional Index (Athanasoglou & Dijkstra,...
Intro Literature The NPO Index NPO Drivers Conclusions
Regional CompetitivenessConnecting an old concept with new goals
Karl Aiginger & Matthias Firgo
Austrian Institute of Economic Research (WIFO)
8th Geoffrey J.D. Hewings Regional Economics Workshop
K. Aiginger & M. Firgo Regional Competitiveness 04/09/2015 WIFO 1 / 23
Intro Literature The NPO Index NPO Drivers Conclusions
Motivation
Quest for competitiveness top agenda for firms, politicians,media
Discussion constantly reduced to “cost competitiveness”
Main argument for low wages, taxes, social/eco standards
However, bulk of literature emphasizes importance ofproductivity, technology, and local/regional capabilities
Current project contributes to the discussion on how tomeasure competitiveness
We propose a measure that is in line with Beyond GDP Goals
Outcome competitiveness “under new perspectives” (alsosocial inclusion and ecological ambition)
K. Aiginger & M. Firgo Regional Competitiveness 04/09/2015 WIFO 2 / 23
Intro Literature The NPO Index NPO Drivers Conclusions
Outline
1 Introduction
2 Relevant Literature
3 New Perspectives Outcomes (NPO) Index
4 New Perspectives Outcomes (NPO) Drivers
5 Conclusions
K. Aiginger & M. Firgo Regional Competitiveness 04/09/2015 WIFO 3 / 23
Intro Literature The NPO Index NPO Drivers Conclusions
Competitiveness as an elusive concept I
Term “Competitiveness” originated at the firm level
Narrowest definition as “cost competitiveness”
“Enlightened” version as balance between factor costs andproductivity per unit
Catching-up economies: Often larger cost difference thanproductivity lag compared to highly developed economies;
Some prominent authors (e.g. Porter, 1990) considerproductivity the only meaningful measure of competitiveness
K. Aiginger & M. Firgo Regional Competitiveness 04/09/2015 WIFO 4 / 23
Intro Literature The NPO Index NPO Drivers Conclusions
Competitiveness as an elusive concept II
Newer literature incorporates structural change andtechnological competitiveness
Price of production factors changes with rising income
Thus, countries have to climb up the quality ladder to remaincompetitive (Aiginger, 1997,1998)
Ultimate goal often seen to enable high standards of living,thus outcomes key to measure a country’s/region’scompetitive performance
Aiginger, Barenthaler-Sieber, Vogel (ABSV, 2013): Outcomecompetitiveness under new perspectives is “ability to deliverBeyond GDP goals” (WWWforEurope definition)
Three pillars: income, social, ecological goals
K. Aiginger & M. Firgo Regional Competitiveness 04/09/2015 WIFO 5 / 23
Intro Literature The NPO Index NPO Drivers Conclusions
Competitiveness as an elusive concept III
Source: ABSV (2013)
K. Aiginger & M. Firgo Regional Competitiveness 04/09/2015 WIFO 6 / 23
Intro Literature The NPO Index NPO Drivers Conclusions
National vs. regional competitiveness I
As at the national level lack of clear definition of regionalcompetitiveness
Absolute (dis)advantages more important at the regional level(Camagni, 2002)
At national level high absolute costs relevant to welfare but noobstacles for trade as can be adjusted via exchange rates andfactor prices (Krugman, 1996)At regional level only very limited mechanisms to adjustabsolute cost differences (same applies to nations in monetaryunions)Thus, uncompetitive region can de-facto exit the market forexports and mobile production factors
K. Aiginger & M. Firgo Regional Competitiveness 04/09/2015 WIFO 7 / 23
Intro Literature The NPO Index NPO Drivers Conclusions
National vs. regional competitiveness II
Regional level as “meso”-level between firms (micro) andnations (macro) (Cellino & Soci, 2002)
Regional competitiveness neither a spatial disaggregation ofnational competitivenessNor the sum of productivities of individual firmsRather regions are extremely open spaces of flows (Doel &Hubbard, 2002) in attracting/ retaining production factorsThus, regions’ competitiveness crucially depends on ability toprovide external advantages in production (i.e. favorableentrepreneurial, institutional, social, technological framework& infrastructure)
“Territorial capital” (OECD, 2001; Camagni, 2008) &“Capabilities” (ABSV, 2013) all important to maintainlong-run competitive advantages
K. Aiginger & M. Firgo Regional Competitiveness 04/09/2015 WIFO 8 / 23
Intro Literature The NPO Index NPO Drivers Conclusions
Recent measures of regional outcome competitiveness
“Foundational competitiveness” (Delgado et al., 2012)Output per potential worker (GDP per working-age individual)Utilization of the labor market potential besides productivityignores several other dimensions on income and social inclusiondoes not distinguish between dirty and clean production
Regional Competitiveness Index (Annoni & Dijsktra, 2013)“The ability to offer an attractive and sustainable environmentfor firms and residents to live and work”Very comprehensive & well elaborated composite indexIncludes institutional quality, health, labor market efficiency,social inclusionIt completely lacks ecological indicators
Europe 2020 Regional Index (Athanasoglou & Dijkstra,2014,2015)
Measures regions’ progress in achieving EU 2020 objectivesEcological EU 2020 goals omitted because a lack of data
K. Aiginger & M. Firgo Regional Competitiveness 04/09/2015 WIFO 9 / 23
Intro Literature The NPO Index NPO Drivers Conclusions
New Perspective Outcomes (NPO) Indicators
Shortcut Description of Composite Indicator No. ofindicators
NPO NPO based on INCOME, SOCIAL, ECO 3INCOME NPO - Income pillar 3SOCIAL NPO - Social pillar 6ECO NPO - Eco pillar 3
COST Cost competitiveness 4STRUCTURE Economic structure 6CAPABILITIES Capabilities to provide competitive outcomes 32
CAP EDU INNO Capabil. - Education & innovation 12CAP SOCIAL Capabil. - Social system 5CAP INST Capabil. - Institutions 5CAP INFRASTR Capabil. - (Intangible) infrastr. & amenities 5CAP ECO Capabil. - Ecological 5
K. Aiginger & M. Firgo Regional Competitiveness 04/09/2015 WIFO 10 / 23
Intro Literature The NPO Index NPO Drivers Conclusions
NPO scores 2011
dark (light) = good (bad) scores
Top 10StockholmInner LondonUpper BavariaTyrolAberdeen(shire)HamburgSouth TyrolTubingenSwabiaSalzburg
K. Aiginger & M. Firgo Regional Competitiveness 04/09/2015 WIFO 11 / 23
Intro Literature The NPO Index NPO Drivers Conclusions
Changes in NPO scores 2005/2011
dark (light) = improvement (decline) in scores
K. Aiginger & M. Firgo Regional Competitiveness 04/09/2015 WIFO 12 / 23
Intro Literature The NPO Index NPO Drivers Conclusions
NPO pillar correlations
NPO INCOME SOCIAL ECO
NPO 1.0000INCOME 0.8962* 1.0000SOCIAL 0.8033* 0.6355* 1.0000ECO 0.6683* 0.4249* 0.2550* 1.0000
* significant at 95%
K. Aiginger & M. Firgo Regional Competitiveness 04/09/2015 WIFO 13 / 23
Intro Literature The NPO Index NPO Drivers Conclusions
Rank differences to other concepts I
NPO vs. GDP per working-age individual (Delgado et al. 2012)
dark (light) = better (worse) NPO rank
K. Aiginger & M. Firgo Regional Competitiveness 04/09/2015 WIFO 14 / 23
Intro Literature The NPO Index NPO Drivers Conclusions
Rank differences to other concepts II
NPO vs. EU Regional Competitiveness Index
dark (light) = better (worse) NPO rank
K. Aiginger & M. Firgo Regional Competitiveness 04/09/2015 WIFO 15 / 23
Intro Literature The NPO Index NPO Drivers Conclusions
Rank differences to other concepts III
NPO vs. EU 2020 Regional Index
dark (light) = better (worse) NPO rank
K. Aiginger & M. Firgo Regional Competitiveness 04/09/2015 WIFO 16 / 23
Intro Literature The NPO Index NPO Drivers Conclusions
Determinants of NPO - Model
Econometric assessment on predictors for changes in NPOscores 2005/11
Cross-sectional growth model
2005 values of explanatory variables to explain changes inNPO scores
Composite variables on costs, economic structures anddifferent dimensions of capabilities
∆NPOi2005/2011=α+ β1NPOi2005
+ β2COSTi2005+ β3STRUCTUREi2005
+ β4CAPABILITIESi2005+ µi2005
.
Also spatial models to account for spatial spillovers
∆NPO2005/2011 = ρW∆NPO2005/2011 + X2005β + WX2005γ + µ2005,
µ2005 = λWµ2005 + ε2005.
K. Aiginger & M. Firgo Regional Competitiveness 04/09/2015 WIFO 17 / 23
Intro Literature The NPO Index NPO Drivers Conclusions
Drivers of changes in NPO - OLS
Changes in NPO 2005-2011 (1) (2) (3) (4)NPO 2005 -0.274*** -0.384*** -0.267*** -0.261***
(0.0512) (0.0608) (0.0579) (0.0674)COST 0.0385 -0.107 -0.0626 -0.0599
(0.0733) (0.0683) (0.0803) (0.0865)STRUCTURE 0.0337 0.0115 -0.108* -0.103*
(0.0640) (0.0534) (0.0549) (0.0586)CAPABILITIES 0.138***
(0.0510)CAP EDU INNO 0.224*** 0.167*** 0.169***
(0.0551) (0.0540) (0.0544)CAP SOCIAL 0.0371 0.0654* 0.0659*
(0.0383) (0.0336) (0.0336)CAP ECO 0.0336 0.0678** 0.0679**
(0.0361) (0.0296) (0.0297)CAP INST 0.188*** 0.154*** 0.157***
(0.0294) (0.0305) (0.0343)CAP INFRASTR -0.0632* -0.0158 -0.0145
(0.0327) (0.0288) (0.0285)NAT CAPITAL -0.00476
(0.0157)OBJECTIVE 1 0.00569
(0.0213)East & South Dummies No No Yes YesConstant Yes Yes Yes Yes
R2 0.213 0.481 0.590 0.591
K. Aiginger & M. Firgo Regional Competitiveness 04/09/2015 WIFO 18 / 23
Intro Literature The NPO Index NPO Drivers Conclusions
Drivers of changes in NPO - Spatial ML
Changes in NPO 2005-2011 (5) (6) (7)NPO 2005 -0.115*** -0.122*** -0.106***
(0.0245) (0.0274) (0.0329)COST 0.0153 0.00802 -0.00250
(0.0263) (0.0296) (0.0337)STRUCTURE -0.0202 -0.0214 -0.0236
(0.0230) (0.0241) (0.0270)CAP EDU INNO 0.0840*** 0.0905*** 0.0821**
(0.0302) (0.0319) (0.0324)CAP SOCIAL -0.00527 -0.00293 0.00344
(0.0145) (0.0155) (0.0177)CAP ECO 0.0289** 0.0275* 0.0246
(0.0144) (0.0152) (0.0172)CAP INST 0.0271** 0.0351* 0.0667**
(0.0128) (0.0183) (0.0295)CAP INFRASTR -0.0234* -0.0245* -0.0207
(0.0137) (0.0144) (0.0163)ρ 0.844*** 0.806*** 0.859***
(0.0347) (0.0682) (0.0395)λ 0.166
(0.210)WX No No YesEast & South Dummies No No NoConstant Yes Yes YesAIC -1065.2 -1101.9 -1101.6
K. Aiginger & M. Firgo Regional Competitiveness 04/09/2015 WIFO 19 / 23
Intro Literature The NPO Index NPO Drivers Conclusions
Actual vs. predicted changes in NPO scores
Value > 0 (< 0) = region performed better (worse) in developing NPO 2005-2011 than predicted by results ofspecification (2), i.e. given endowments in COST, STRUCTURE and the individual capabilities.
K. Aiginger & M. Firgo Regional Competitiveness 04/09/2015 WIFO 20 / 23
Intro Literature The NPO Index NPO Drivers Conclusions
Summary & Policy Conclusions
Indicator on Outcome Competitiveness under NewPerspectives (NPO)
NUTS2 regions in 16 EU countries
Top regions in Western/Northern Europe; East/South laggingbehind
Regions in East (South) rank poorly in eco (social) pillar
Substantial differences to other recent indices due to inclusionof ecological dimension
Determinants of recent changes: mainly education &innovation capabilities; institutional quality; to some extenteco and social capabilities;
Cost competitiveness not found a significant predictor
High-road strategies are feasible
Competitiveness as important concept if well defined
K. Aiginger & M. Firgo Regional Competitiveness 04/09/2015 WIFO 21 / 23
Intro Literature The NPO Index NPO Drivers Conclusions
Limitations & Outlook
Only first attempt to measure NPO at regional level
Should serve as starting point for further research/discussion
Regional data on social & eco dimension still extremely scarce
Focus on indicators that vary at the regional level
Omission of national data may ignore factors relevant at theregional level
No wide set of robustness checks as Regional CompetitivenessIndex yet
K. Aiginger & M. Firgo Regional Competitiveness 04/09/2015 WIFO 22 / 23
Intro Literature The NPO Index NPO Drivers Conclusions
Thank you for your attention!
[email protected]@wifo.ac.at
K. Aiginger & M. Firgo Regional Competitiveness 04/09/2015 WIFO 23 / 23