ABSTRACT
This chapter assesses the importance of specialization, socio-economic factors and regional capabilities in producing and absorbing new knowledge for the evolution of European Union (EU) regional disparities. The chapter focuses on the distinct behaviour of labour productivity and the ratio of total employees to population that, for simplicity, we call the employment rate. Therefore one can present some descriptive statistics on such disparities in Europe and within each country before looking at the role of our groups in explaining labour productivity and employment rate disparities. A first and simple way to assess the role of our groups in the evolution of regional disparities in labour productivity and employment rates is through the analysis of variance. Hence, before investigating the role of specialization, socio-economic characteristics and knowledge groups in shaping labour productivity and employment rate distributions, people examine the degree of spatial correlation of these distributions in 2004 and 2011 by means of the Moran statistics and the Moran scatter plot.
