The contributions of human capital, R&D spending and convergence to total factor productivity growth

The study investigates the drivers of total factor productivity (TFP) growth, covering 99 European
regions from 31 countries over the period 2000–13. It shows that human capital endowment had a positive effect
upon TFP growth, particularly in advanced regions, but the effect from regions’ own research and development
(R&D) expenditures was largely absent. The effects of human capital and R&D on TFP growth varied with the
productivity gap. Further, there was a threshold effect in convergence, where stronger TFP growth was
associated with both a larger productivity gap and a higher initial level of productivity. Spatial spillover effects
had a positive impact upon TFP growth.