A series of short papers on regional research and indicators produced by the Directorate-General for Regional Policy

Estimating the capital stock for the NUTS 2 regions of the EU-27 2 Disclaimer Although the majority of research presented in this paper has been funded by the European Commission (DG Regional Policy), the material contained within reflects the views only of the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein. Acknowledgements The research for this paper is based mainly on a project entitled 'Pilot Study on the Estimation of Regional Capital Stocks' for the European Commission (DG Regional Policy). We are grateful to the European Commission for permission to draw upon that research. We are grateful for the various comments made on the paper at that conference. Finally, we must thank other people who helped out on the original project with data processing and programming, namely Ying Chou and Jonathan Stenning of Cambridge Econometrics and Dr Fabio Manca of IPTS, Seville, for work on total factor productivity calculations. Abstract To identify and target lagging regions, policy-makers require statistics to be produced at regional level. In many instances it is not possible simply to compare regional-level statistics produced by Member State national statistical offices as there is variation in the methods and assumptions used to produce them. Capital stock statistics at the national level have been available for most countries of the EU-27 for some time, but statistics at the regional level are absent for almost all countries. Where they do exist the methods used to produce them are not consistent across countries. This paper assesses the feasibility of producing comparable estimates of the capital stock at NUTS 2 regional level for the EU-27 and makes some initial estimates. The paper outlines the method and data employed, and the techniques used to fill missing values. The approach is a Perpetual Inventory Method based on that outlined in the OECD Manual (2001; 2009) on capital estimation, and the data employed were taken from Eurostat or other publicly available sources wherever possible. The paper analyses the robustness of the capital stock estimates produced, as well as their impact on productivity analysis, and suggests how they can be improved in future updates.