Turning the tide: how public R&D investment shapes European regional development

This paper evaluates the impact of Mission-Oriented Innovation Policies and public R&D investment on regional economic development in Europe by quantifying the responses of GDP, employment and private R&D across 243 NUTS-2 regions from 1980 to 2019.Using linear and non-linear Local Projections methods,we find that public R&D investment generates the largest multiplicative effect and produces a greater impact in lagging regions than in leading ones,underscoring its crucial role in fostering regional convergence anddrivingtechnologicaladvancement acrossEuropean regions.Finally,ourfindingsshow that fiscal stimuli are especially effective during periods of deep recession.