The Impact of Human Capital and Creative Industries on Regional Growth in Romania

Abstract

The paper uses Barro’s 1991 model of economic growth for studying the effects of human capital and the creative industries upon economic growth in Romanian regions. This is the first inquiry in this area that takes as a study case the eight NUTS2 regions of Romania. The results show that the share of enterprises active in the creative industry has a significant positive impact on economic growth being the variable with the strongest influence on real GDP growth rates. The second variable in order of importance that has a positive influence is enrolment in secondary education. Enrolment in tertiary education has a negative effect that can be interpreted either as evidence towards the fact that a university degree without entrepreneurial action is not contributing to growth and that more appealing regions rip-off human capital endowment that generate negative externalities for less appealing regions where limited human capital contributes more to growth. The paper discusses also conditional beta-convergence aspects for Romanian development regions.