The determinants of industrial crises across EU regions

Abstract

This paper exploits a unique dataset that combines data on the number of business closures related to industrial restructuring with key indicators on the business structure, economic performance, and material and immaterial assets across EU27 regions (NUTS 2 level). Models for count data (Poisson and Negative Binomial) are then used to empirically test the effects of those key indicators on the (probability of) number of closures. Productivity and knowledge related variables tend to decrease the (probability of) number of business closures at the regional level, in contrast unit labour cost and long terms unemployment show a positive effect