Research Activities and their Relation to Economic Performance of Regions in the European Union

Abstract

Background: The intensity of innovation could often be crucial for further economic development of the regions. Science and technology are often seen as the key factor supporting innovation in the regions. Furthermore, we can assume that higher intensity of research activities could lead to better economic performance. Objectives: Research aims to examine the link between the economic performance of the region and the intensity of science and technology activities, proxied by the share of employees in science and technology. Methods/Approach: The analysis is based on panel data for NUTS2 regions of the European Union (EU) member states. We conducted correlation analysis, panel Granger causality tests and regression analysis. Results: Our results suggest the existence of a significant positive correlation between GDP per capita and the share of employees in science and technology. Moreover, the regions with a higher intensity of science and technology activities are mostly characterized by relatively low unemployment rates. Conclusions: Research activities are positive correlated with regional GDP and negatively correlated with unemployment. However, increasing the share of employment in science and technology beyond a certain turning point would not lead to any further positive effects on regional economic performance.