This book tries to make new contributions to the current research on the link between innovation and technological convergence in the European regions. From the theoretical perspective, an attempt is made to provide a detailed view of the issue of catching-up and speeding-up effects of innovation activities in the technology race of regions by considering various conceptual approaches rooted in R&D-based endogenous growth theory, technology gap theory and innovation geography. As far as the methodological aspect of the research is concerned, the multi-faceted approach to testing TFP convergence in the sample of 219 European regions in the period 2008–2018 is applied.

Consistent with prior research, we reveal a high degree of dispersion in TFP distribution across European regions. We demonstrate that the most productive regions in EU are placed along the UK–Germany–Italy corridor, whereas the lowest levels of TFP are present in peripheral regions of Eastern and South-Eastern Europe. We also observe significant interregional dispersion in regional TFP within countries and conclude that it might arise from different efficiency of the innovation and regional policy pursued at the national level in order to reduce interregional disparities. Moreover, the results indicate the existence of east-west and north-south divisions in TFP clustering.

We find that both the stochastic technological convergence and the absolute β-type technological convergence took place in European regional space in the period 2008–2018. We conclude that the revealed absolute β-convergence of TFP across European regions may result from the implementation of EU regional policy, intended to pursue the goal of economic, social, and territorial cohesion. Our results indicate that convergence process across EU regions in 2014–2018 was more dynamic than in 2008–2013. It may arise from the significant change in the directions of regional innovation policies in the 2014–2020 programming period due to the implementation of the smart specialization strategies which enabled the increase in the effectiveness of public financing and contributed to more dynamic development of less developed regions.

Moreover, the results of the analysis of the β-convergence in the spatial context reveal the existence of technological interdependence between regions evinced by the dependence of the convergence speed of a given region on TFP levels of contiguous regions. This confirms the significant role of spatial proximity in innovation diffusion across regions due to occurrence of synergy effects and increasing returns. Our results correspond with the catching-up approach as technologically lagged regions that are not capable to innovate could benefit from the adoption of technological improvements developed by innovation leaders.

Applying conditional β-convergence model, we present the impact of innovation on the speed of convergence. Our results show that both R&D investments and patenting activities stimulate convergence processes. The results of estimation of the conditional β-convergence model with spatial effects indicate the importance of knowledge externalities across regional economies in the process of TFP convergence. We reveal that spatial spillovers due to R&D activity performed in other regions impact have a strong impact on the convergence process of a given region. However, regarding the impact of patenting activity on the speed of convergence our results remain inconclusive.

Extending the β-convergence framework, we identify three local clubs differing in patterns of convergence in TFP. We demonstrate that initial conditions related to regional innovation systems can explain the emergence of multiple steady-state equilibria across European regions. We conclude that an increase of innovative SMEs collaborating with others leads to convergence processes that take place in the club of regions with the lowest TFP level. On the other hand, human capital, product and process innovation, intellectual property rights in the form of designs, and the share of the most cited scientific publications stimulate convergence processes peculiar to regions with the highest TFP level.

Basing on variables reflecting the performance of regional innovation systems, we endogenously determine four innovation clubs of regions: Emerging Innovators, Moderate Innovators, Strong Innovators, and Innovation Leaders. The results of the absolute β-convergence model for individual regional innovation clubs indicate that innovations accelerate TFP convergence. We conclude that the convergence speed and the average level of TFP rise gradually with the level of regional innovativeness. We demonstrate that the regional club characterized with the lowest levels of innovation performance (Emerging Innovators) and lowest average level of TFP converges very slowly with TFP levels, whereas the club of Innovation Leaders achieves the highest speed of TFP convergence and the highest average level of TFP over the analyzed period.

Evaluation of the role of innovation in the processes of technological convergence in the European regional area is crucial from the standpoint of the effectiveness of regional and innovation policy. The revealed existence of TFP convergence clubs requires a sustainable model of policy actions focused on promoting both the advantages of the strongest regions and the development opportunities in the lagging ones. Our results demonstrating that the convergence speed and the average level of TFP rise gradually with the level of regional innovativeness provide empirical support for the formulation and implementation of innovation policies which would be more tuned to the initial and structural characteristics of particular regions.