Au revoir Paris! Spanish regions closer to the EU average and further away from the leaders

This paper confirms that Spanish regions in 2015 were closer to the EU average in labour productivity than in 2000, but further away from the richest regions such as Île de France. A dynamic shift-share analysis at a 10-industry level of disaggregation shows that the main driver of convergence with the EU average is catch-up in labour productivity within the same industry, while disparities with the top regions (especially Île de France) mainly involve differences in patterns of specialization (between-industry divergence) followed by technological divergence (within-industry effect). The industry mix of the regions reveals that a new pattern of specialization is taking shape in Europe, driven by those services more likely to benefit from information and communications technologies. The location of such services in the wealthiest regions is a growing source of regional disparities that needs to be considered in the design of regional policies. Within Spain, these sources are also present in the pattern of specialization seen in the most advanced regions.