Regional reindustrialization patterns and productivity growth in Europe

Abstract

After a long period of deindustrialization, Europe faces ‘the need to reverse the declining role of industry’, as the European Union officially claims, to relaunch productivity. Despite this strong political claim, scientifically sound analyses on whether a reindustrialization process takes place, and if it is accompanied by a relaunch of productivity, are still missing. Drawing on the path-dependence theoretical framework, different reindustrialization patterns are conceptually identified and operationally associated with European NUTS-2 regions thanks to an original database of value added at (sub-manufacturing) sectoral regional level in different time spans. Results suggest that the patterns are associated with different degrees of industry productivity growth. Ad-hoc policies accompanying different reindustrialization modes are suggested. They can help to achieve a critical mass of reindustrialization that could potentially stimulate a still missing effect on aggregate productivity increase.

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