Regional economic resilience, productivity growth and sectoral interconnectedness

This paper develops a theoretical model for the conceptualization and empirical analysis of regional economic resilience. Our production function framework is applied to empirically assess the effect of pre-crisis conditions on regional resilience accounting for exogenous changes in technology and changes in production factors. Spatial regression analysis indicates that intersectoral linkages are important factors for explaining the resilience of regions to negative exogenous shocks. A key finding of the study is the positive effect of the interconnectedness of agriculture, construction, and electrical, optical and transport equipment sectors on the ability of European Union regions to absorb the adverse effects of the 2008 economic crisis.