Valuable policy conclusions based on sound empirical base
The aim of the continuing research programme «Policy and Regional Growth» is an empirically sound contribution to the discussion of location factors and economic growth.
The results from Phase II show – among other things – that in most policy fields the direction of the influence on growth performance of a region confirms with the hypotheses. Phase II concentrated on the effects of location factors on regional productivity growth. Sometimes surprising are the different sizes of the effects of the different policy fields: Taxation shows a comparatively large impact on regional development, whereas indicators for innovation resources point in the expected direction, but influence growth only by small scale.
The findings also point to the fact that a further enlargement of the database especially regarding explanatory variables but also regarding regional coverage as well as a more complete definition of the left hand side – GDP, labour input, productivity – are necessary to understand the mechanisms at work in more detail.
BAK Basel Economics will continue this research program and extend the analysis further in several directions. For the research phase 2005/2006 the following steps are planed:
– Database enlargement: Inclusion of US regions into the dataset, adding further explanatory variables (especially on innovation)
– Inclusion of the labour market side
– Further enhancing the model and improving the econometric tools
– Industry/sector specific analysis of the influence of location factors
Results can be expected in the summer/autumn of 2006.
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