Regional Economic Growth Mechanisms: Multipliers, Productivity, Competitiveness, and Their Effects on Territorial Disparities: A Theoretical and Applied Analysis

Abstract

Regional economic growth remains a central challenge in contemporary economic policy, particularly within the context of European integration and globalization. This article examines the fundamental mechanisms driving regional economic growth—including economic multipliers, productivity dynamics, and competitiveness factors—and analyzes their complex effects on territorial disparities through both theoretical frameworks and empirical evidence. Drawing on recent theoretical advances and comprehensive empirical studies from European regions, this research demonstrates that regional growth emerges from competitive, endogenous, and cumulative processes shaped by local resource endowments, agglomeration economies, and spatial spillovers. The analysis reveals a persistent tension between policies promoting aggregate economic growth and those aimed at reducing spatial inequalities. Specifically, the paper presents detailed empirical evidence from Italian regions showing that multiplier effects vary significantly based on regional capacity constraints, with values ranging from 0.4 to 2.5 depending on the expenditure type and regional context. Furthermore, an analysis of European convergence patterns indicates a "two-speed" dynamic where macro-level convergence coexists with regional divergence. The paper concludes by proposing evidence-based policy frameworks centered on innovation support and territorial capital development, arguing that place-based policies guided by rigorous territorial impact assessments are essential for addressing the persistent North-South divides and core-periphery disparities observed across the continent.