"Institutions and the productivity challenge for European regions"


Europe has witnessed a considerable labour productivity slowdown in recent decades. Many potential explanations have been proposed to address this productivity ‘puzzle’. However, how the quality of local institutions influences labour productivity has been overlooked by the literature.

In this paper, published in the Journal of Economic Geography, Andrés Rodríguez-Pose (London School of Economics and Political Science) and Roberto Ganau (Department of Economics and Management of the University of Padova), show that institutional quality influences regions’ labour productivity growth both directly—as improvements in institutional quality drive productivity growth—and indirectly—as the short- and long-run returns of human capital and innovation on labour productivity growth are affected by regional variations in institutional quality.

You can read the full article here