Impacts of Intangible Assets on Regional Growth and Unemployment

56 Pages Posted: 30 Oct 2013

See all articles by Christian Dreger

Christian Dreger

European University Viadrina Frankfurt (Oder); IZA Institute of Labor Economics; Chinese Academy of Social Sciences (CASS)

Georg Erber

European Productivity Research Center (EPRC)

Hannah Wesker

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg

Date Written: July 28, 2011

Abstract

The paper studies the impact of intangible assets on economic growth and unemployment from a regional perspective. The familiar relationship between changes in the unemployment rate and economic growth – known as Okun’s law – is taken as a workhorse of the analysis and estimated for the 27 EU-member countries at the NUTS 1 level. The results establish Okun’s law as a firm relationship to describe the growth-uemployment nexus. However, the analysis reveals substantial heterogeneities across the regions. In fact, the law is more inline with the regions of the old EU-member states. Similarly in Germany a significant East-Westdivide is observable. In addition there seems to be a separation between Northern and the Southern European regions. Therefore, the model is extended by including spatial effects to identify if there are significant spillovers, and whether they have changed over the integration process. Our findings confirm the hypothesis that spatial dependencies matter for the Okun relationship. The evidence is based on the spatial error and the spatial lag model although the former has a slightly better performance than the latter alternative. Due to the high regional aggregation level direct neighbourhood effects are dominant The importance of spatial effects has risen over time, i.e. the economic development has become more similar in the integration process. For less advanced regions regional economic growth and unemployment do not depend on intangible assets.

Keywords: intangible assets, spatial econometrics, EU, growth, unemployment

JEL Classification: C21, E24, O47, O52

Suggested Citation

Dreger, Christian and Erber, Georg and Wesker, Hannah, Impacts of Intangible Assets on Regional Growth and Unemployment (July 28, 2011). Available at SSRN: https://ssrn.com/abstract=2346135 or http://dx.doi.org/10.2139/ssrn.2346135

Christian Dreger

European University Viadrina Frankfurt (Oder) ( email )

Frankfurt (Oder)
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Chinese Academy of Social Sciences (CASS) ( email )

Beijing, 100732
China

Georg Erber (Contact Author)

European Productivity Research Center (EPRC) ( email )

Hannah Wesker

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg ( email )

Schloßplatz 4
DE Bavaria 91054
Germany

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