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Innovation, demand and structural change in Europe.

  • Economics


The model and the empirical test developed in this paper address the determinants of structural change for six major European economies from 1995 to 2007. The performances of sectors are explained by the unfolding of uneven technological opportunities and different conditions of demand. Building on the literature on structural change and on previous studies on the link between sectoral patterns of innovation and economic performance of sectors, a set of tests is developed on a panel of 21 manufacturing sectors and 17 services, merging three different sources of data. The results show the importance of breaking up the innovative efforts of sectors and the role of demand in shaping their trajectories of development.

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