Analysis of Regional Endogenous Growth

Endogenous growth theory has deeply influenced regional growth analyses and inspired regional development policies. Evidence of lack of convergence, club convergence and spatial polarization of per worker income levels has led scholars to question the explanatory power of neoclassical exogenous growth models and to look at endogenous growth theories as proper frameworks to interpret regional development. In particular, those models, which emphasize the role of knowledge spillovers as driving forces for economic growth and identify a large set of selfreinforcing mechanisms that can potentially cause low-productivity traps, have become central in the scientific debate. Only during the last ten years, however, there have been some analytical attempts to regionalize endogenous growth theory. This paper provides a critical survey of the growing literature on regional extensions of endogenous growth analysis. The focus is on those theoretical and empirical studies which have tried to explain lack of regional convergence, multiple equilibria and spatial polarization. The paper also suggests some directions for future research in this field.