European regional productivity : does country affiliation matter?

We assess the importance of country affiliation for European regional productivity growth between 1980 and 2012 and reveal that 93% of regional variation in gross domestic product (GDP) per worker is explained at the national level, regional divergence was experienced throughout the period after 1983 and country divergence occurred throughout the period until a reversal around the beginning of the recent recession. Distinct groups of regions have been growing together and although regional groups are generally confined to national borders, there are notable exceptions. The results rehabilitate the importance of national borders for understanding the productivity performance of regions, implying that regional policy-makers should take cognizance of national effects.