The finding that the economic performance of regions is driven by a small set of productive firms calls for a granular analysis of regional competitiveness. Among the productive firms, a significant contribution is made by so-called High-Growth Firms (HGFs), which also account for the bulk of new jobs created in the region. In this paper, we investigate the relationship between regional competitiveness and HGFs by examining which pillars of regional competitiveness stimulate the development of HGFs. The determinants that stand out relate to the quality of business-supporting institutions and governance of the region, agglomeration benefits, an adequate infrastructure and the availability of a highly educated workforce. More importantly, we show the premium of hosting a strong creative class in the region.

This paper estimates the causal effects of Flanders' main industrial policy programme, aiming to support economic development in lagging municipalities. The identification strategy exploits a State Aid reform which required Member States to propose a designation methodology and a selection of eligible municipalities in accordance with the new guidelines. While the proposed designation indicators allow us to account for selection on observables, further compliance with State Aid guidelines make causal inference possible. Additionally, we exploit exogenous intervention in the selection of municipalities, as the first regional aid map was not accepted by the European Commission. We find strong evidence for a 10% effect on manufacturing employment, largely explained by jobs safeguarded in declining industries.